Citrix Systems to go Private in $16.5B PE Deal

Cloud computing company Citrix Systems, Inc. (Nasdaq: CTXS) is set to be acquired by affiliates of private equity company Vista Equity Partners and Elliot Investment Management L.P.’s affiliate Evergreen Coast Capital Corporation in a deal that will turn the public tech company private.

Citrix will be bought for $16.5 billion cash, which includes the assumption of Citrix’s debt. Pursuant to the agreement, Citrix shareholders will receive $104 cash per share. Accordingly, this share price “represents a premium of 30 percent over [Citrix’s] unaffected 5-day VWAP as of December 7, 2021, the last trading day before market speculation regarding a potential transaction.” The deal is structured as a reverse triangular merger with a no-shop provision.

According to the January 31 filing, Citrix will be combined with TIBCO Software, a company in Vista’s portfolio; TIBCO is an enterprise data management company. The filing states that the combination of Citrix, which allows users to work from anywhere, and TIBCO will bring Citrix’s “secure digital workspace and application delivery suite with TIBCO’s real-time intelligent data analytics capabilities.” Furthermore, this combination will create one of the largest software providers, serving 400,000 customers, which reportedly includes 98% of the Fortune 500 companies and 100 million users in 100 countries. Subsequently, this will fast-track Citrix’s growth strategy and SaaS transition. As noted in the filing, the combined Citrix and TIBCO will “be positioned to provide complete, secure and optimized infrastructure for enterprise application and desktop delivery and data management to advance hybrid cloud IT strategies and meet the needs of the modern enterprise,” particularly during the pandemic-induced hybrid work modalities.

“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,” Bob Calderoni, Chair of the Citrix Board of Directors and Interim CEO and President said in a statement. 

Upon consummation, Citrix shares will no longer trade on Nasdaq and it will become a private company. However, it will continue to operate under the Citrix name and will still be headquartered out of Fort Lauderdale, Florida. Currently, Elliott and its affiliates own a 12% stake in Citrix.

 “We have always viewed Citrix as a true technology pioneer, building and defining so many categories that have changed the landscape of the industry,” Monti Saroya, Co-Head of Vistas Flagship Fund and Senior Managing Director, said in a statement. “As a private company, Citrix will have access to additional resources and support, as well as more flexibility to take advantage of strong secular tailwinds with trends supporting modern and secure remote hybrid work to serve the combined customer base and invest in high growth markets.”

A company may choose to go from public to private to face fewer regulations as a private entity and not having to report quarterly earnings. For example, McAfee has famously flip-flopped between public and private to suit its needs. Companies like Burger King, Dell, H.J. Heinz, Panera Bread and Hilton Worldwide Holdings, have also to go from public to private (and sometimes back to public again), according to Investopedia.

The deal is set to close mid-2022, subject to customary closing conditions, including Citrix shareholder and regulatory approval.

Citrix is represented by Goodwin Procter LLP and its financial advisor is Qatalyst Partners, L.P. Vista and TIBCO are represented by Kirkland & Ellis LLP and Evergreen is represented by Gibson, Dunn & Crutcher LLP as well as Debevoise & Plimpton LLP. Vista and Evergreen’s financial advisors are BofA Securities, Barclays, Citi, Credit Suisse, Goldman Sachs & Co. LLC, Lazard and Mizuho Securities USA LLC.