Citrix and TIBCO are to merge to create what is being pitched as a SaaS enterprise giant, servicing 100 million users in 100 countries, including 98% of the Fortune 500.
The long term direction of Citrix has been the subject of some debate in recent years. Rumors of a buy out by Evergreen Coast Capital, the private equity firm owned by activist investor Elliott Management Corp, emerged in the Wall Street Journal over the weekend, before being confirmed by Citrix yesterday. Evergreen is joined by affiliates of Vista Equity Partners in the $16.5 billion deal. Vista acquired TIBCO in 2014 for $4.3 billion.
Following planned completion of the transaction mid-year, Citrix will continue to operate under its brand, but will be a private company and merge with TIBCO. As per the official announcement:
It’s all about the changed nature of the way enterprises work, according to TIBCO CEO Dan Streetman:
Despite having some useful work-from-home tech at its disposal, Citrix hasn’t maintained the high-flying growth numbers of other remote working enablers, admitting in November that it had over-estimated its likely growth rate in 2021 following a COVID boost in 2020.
Yesterday it turned in Q4 numbers showing 5% year-on-year revenue growth to $851 million, while full year revenue actually declined one percent to $3.32 billion. Net income for Q4 was $103 million, down from $112 million a year ago, while the full year numbers fell from $504 million last year to $307 million.
The firm has struggled with the transition to a subscription-based cloud operating model. It’s notable that this was cited as a driver for the planned merger as Citrix interim CEO Bob Calderoni noted:
Just a couple of months back Calderoni, who stepped into the interim CEO role at short notice following the departure of David Henshall last October, admitted:
Now we know the plan.
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