Citrix software company nears $13bn buyout by Elliott and Vista

Jan 31, 2022 | News

Software company Citrix is ​​close to closing a $13bn deal in what will be the largest leveraged buyout in months since stocks in public technology companies plunged.

Citrix is ​​close to an agreement to sell Elliott Management and Vista Equity for $104 per share. The company and Elliott did not respond to emails asking for comment, and Vista declined to comment.

The deal will be one of the largest technology buyouts ever and will end a years-long struggle with Elliott, which began campaigning for change at the company after investing in 2015.

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It will also be the first buyout in 2022 of more than $10 billion after a year of record private takeovers of $1.1 trillion, according to PitchBook.

Elliott Evergreen Coast Capital’s private equity arm was involved in some of the biggest deals of the past year, including the $17 billion sale of Athenahealth along with Veritas Capital to a consortium of private equity buyers.

Vista, which has $86 billion in assets under management, has been one of the private equity industry’s most active investors in software acquisitions. The firm, headed by billionaire Robert Smith, has already announced nine deals this year, according to PitchBook.

Citrix software allows employees to securely work remotely from any of their devices, an area that has benefited from rising demand during the pandemic.

However, Citrix stumbled in its move to remote cloud storage and a subscription-based business model, a common problem for legacy tech companies.

David Henshall, a former chief executive of Citrix, resigned in October after consecutive quarters fell short of sales targets. Citrix Chairman Bob Calderoni, a former chief executive of software company Ariba, replaced Henshall on a temporary basis.

Last year, Citrix paid about $2.3 billion in cash to acquire Wrike, a Vista-backed collaboration software company. In 2017, Citrix sold its GoTo services business to LogMeIn, a business that was taken over by Elliott’s Evergreen Coast division and buyout firm Francisco Partners in August 2020 for $4.3 billion.

The deal comes at the height of a turbulent period for public technology companies.

Shares in cloud software companies have fallen by one-third in the past three months, according to the BVP Nasdaq Emerging Cloud Index, as U.S. investors fear cyclical increases in interest rates to cope with rising inflation.

In December, Bloomberg reported for the first time that Elliott and Vista were considering a joint acquisition of Citrix. The company’s shares have risen more than a quarter since the publication of the initial report and on Friday ended trading at $105.55.

Source: Dayton News

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