Elliott and Vista Equity take Citrix private in $16.5 billion deal

Jan 31 (Reuters) – Software company Citrix Systems (CTXS.O) said on Monday it would be taken private for $16.5 billion, including debt from subsidiaries of Elliott Management and Vista Equity Partners, which seek to tap into the pandemic-driven cloud boom. computing.

The company said its shareholders would receive $104 per share, implying a net worth of nearly $13 billion, and confirms a Sunday Reuters report on the joint offering. Read more

The deal, which is expected to close by mid-2022, will combine Citrix with Vista’s data analytics company, TIBCO Software. Vista will own about 65% of the combined company after closing, people familiar with the matter said.

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Elliott and Vista believe the public market has not fully recognized Citrix’s year-over-year recurring revenue growth and that by combining the two players in the enterprise software space, it can sell products to a heavily overlapping customer base. 400,000 corporate clients in 100 countries.

The deal represents a 24.3% premium to Citrix’s close on Dec. 20, when talks of a deal were first reported, but is lower than its Friday close.

“Today’s announcement is the culmination of a five-month strategic review process,” Citrix Interim Chief Executive Officer Bob Calderoni said in a statement.

Citrix, based in Fort Lauderdale, Fla., has only begun to focus more on cloud computing in recent years, providing remote work solutions and networking software for businesses.

Elliott’s Jesse Cohn joined the company’s board in 2015, when the hedge fund urged Citrix to divest some units and repurchase shares, before stepping down in 2020.

However, Citrix’s inability to capitalize on the boom in virtual work during the COVID-19 pandemic sent its stock tumbling 23% last year.

“In the midst of significant business model transformation, privatization is often the best opportunity to have the runway to grow,” said Daniel Newman, an analyst at Futurum Research.

Private equity players have recently increased their stakes in the cloud-based software space. The deal also signals a strong market for leveraged buyouts, as Elliott and Vista secured $15 billion in committed financing from a consortium of banks.

Newman compared Citrix’s deal to KKR & Co (KKR.N) and Clayton Dubilier & Rice which robbed Cloudera of $4.7 billion last year as the company struggled to make money and grow.

Shares of Citrix fell 3.4% to $101.94 on Monday.

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Reporting by Chavi Mehta in Bengaluru and Krystal Hu in New York, additional reporting by Akash Sriram and Eva Mathews; Edited by Ramakrishnan M. and Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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