Citrix Getting Bought by Vista Equity Partners and Elliott Investment Management for $16.5B

Citrix Systems Inc., long known for its virtual desktop infrastructure (VDI) solutions, is getting acquired for $16.5 billion in an all cash deal carried out by two investment firms, according to a Monday announcement.

The buyers are Vista Equity Partners and Elliott Investment Management. Specifically Elliott's Evergreen Coast Capital Corp. affiliate is named in the deal. The investment firms plan to make Fort Lauderdale, Fla.-based Citrix a private company and combine its efforts with enterprise data management solutions from Tibco, which is owned by Vista.

Citrix plus Tibco
The combined efforts of Citrix and Tibco was described as accelerating the desktop-as-a-service (DaaS) business, as well as hybrid work and "digital transformations," per Bob Calderoni, chair of the Citrix board of directors and interim CEO and president, in a released statement:

Together with TIBCO, we will be able to operate with greater scale and provide a larger customer base with a broader range of solutions to accelerate their digital transformations and enable them to deliver the future of hybrid work. As a private company, we will have increased financial and strategic flexibility to invest in high-growth opportunities, such as DaaS, and accelerate its ongoing cloud transition.

Because Citrix is going private, its fiscal-year 2021 Q4 earnings, as reported on Jan. 31, will be its last such report. Citrix showed positive quarterly revenue of $851 million in 2021 Q4, vs. $810 million in 2020 Q4. However, there was an overall 1% decrease in revenue when compared year over year ($3.22 billion in 2021 vs. $3.24 billion in 2020).

The Citrix and Tibco combination will create one of the "world's largest software providers," the announcement by Vista and Elliott claimed. Exactly how the two software companies' offerings would be combined wasn't explained, but business market scale seems to be one of the considerations. They'll jointly serve "400,000 customers, including 98 percent of the Fortune 500, with 100 million users in 100 countries," the announcement indicated.

The Citrix purchase is expected to close mid-year, pending Citrix shareholder and regulatory approvals.

Vista bills itself as an asset management firm, with a portfolio that's focused on the high-tech software market. Elliott Investment Management bills itself as a fund manager and asset investment firm with a focus on "risk management" and "opportunistic trading." Elliott is more popularly known as a so-called "activist investor" and also a "vulture capital" type of firm because of its Founder, President and Co-CEO, Paul Singer.

It was Elliot Investment Management that had prodded Citrix in 2015 to sell off some assets and cut costs, per an account by The Wall Street Journal.

Citrix and Microsoft Partnership
Citrix, a 33-year-old company, has had a strong partnership with Microsoft on VDI solutions. A couple of years ago, the two companies pledged renewed fealty, with Citrix embracing Microsoft Azure services and Microsoft promoting Citrix Workspace as a preferred digital workspace solution.

Microsoft's foray into VDI services with Azure Virtual Desktop still included both Citrix and VMware as main partners in helping organizations make VDI work. Later, in August, Microsoft commercially released its Windows 365 DaaS offering, which possibly simplified remote desktop access for organizations in comparison with the Azure Virtual Desktop service.

Citrix notably launched its own DaaS offering on the Google Cloud Platform in October to support the "hybrid worker" market, becoming a "strategic virtual desktop partner of Google Cloud." The effort was described as an enhancement of their years-long collaboration, but Citrix also indicated at the time that it planned to "build a foundation of their cloud services on Google Cloud."

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.


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