Citrix to be Acquired by Vista and Evergreen/Elliott for $16.5B

Citrix Acquisition Signals IT Consolidation Trend

A significant shift is occurring within the IT sector, driven by enterprise demand for comprehensive service providers in today’s hybrid work environment. Citrix, a well-established virtualization company undergoing a transition to cloud computing, is set to be acquired by private equity firms Vista Equity Partners and Evergreen Coast Capital – an Elliott Investment Management affiliate – in a deal valued at $16.5 billion.

Deal Details and Background

Vista intends to integrate Citrix with Tibco, a company it previously acquired in 2014 for $4.3 billion. This is an all-cash transaction that will also encompass the assumption of Citrix’s existing debt, according to company announcements.

Speculation regarding Citrix’s future has been ongoing for at least the past five months, culminating in recent reports suggesting a potential acquisition by Vista and Elliott for approximately $13 billion.

Going Private and Shareholder Benefits

Currently listed on the Nasdaq exchange, Citrix will become a private entity following the completion of this deal. Shareholders of Citrix are expected to receive $104.00 in cash for each share held, representing a 24% premium over the closing price on December 20, 2021 – the last trading day before initial media coverage of the potential bid.

Notably, Evergreen was already a Citrix investor prior to the announcement of this acquisition.

PE Firms and Investment Strategies

Private equity firms, much like venture capital firms, currently possess substantial capital reserves requiring investment. A strategic approach to deploying these funds involves acquiring established technology businesses that could benefit from restructuring and consolidation.

Synergies and Market Positioning

The combination of Citrix and Tibco is anticipated to facilitate cross-selling opportunities, integrating Tibco’s analytics capabilities with Citrix’s virtualization and cloud computing offerings. This alignment addresses a growing need among enterprises for streamlined vendor relationships and improved financial predictability in IT services, particularly in support of increasingly remote workforces.

The merged entity will boast a substantial customer base from its inception, serving 400,000 customers, including 98% of the Fortune 500, and supporting 100 million users across 100 countries.

Executive Statements

Bob Calderoni, chair of the Citrix board and interim CEO and president, stated, “Citrix has been the leader in secure hybrid work for three decades. Our platform delivers secure and reliable access to the applications and information employees need, regardless of location.”

He continued, “Combining with TIBCO will expand this platform and enhance customer outcomes. As a private company, we will have greater financial flexibility to invest in growth areas like DaaS and accelerate our cloud transition.”

Dan Streetman, CEO of TIBCO, commented, “There has never been a better time to be in the business of connected intelligent analytics, and we’re thrilled to bring our solutions to Citrix’s customers.”

“The workplace has fundamentally changed, and companies need real-time access to insights from data. I’m excited about our combined vision and partnership.”

Monti Saroya, co-head of Vista’s Flagship Fund and senior managing director, added, “Citrix is a technology pioneer, and as a private company, it will have access to additional resources and support to capitalize on the trends driving modern and secure remote hybrid work.”

Prior Relationship and Strategic Rationale

Vista and Citrix have a pre-existing relationship, with Vista acquiring project management platform Wrike from the PE firm for $2.25 billion a year ago. Speculation surrounding a potential sale of Tibco had also surfaced, but Vista opted for integration with Citrix, reflecting the evolving ways enterprises are evaluating and procuring IT solutions.