Citrix to be acquired by Vista and Evergreen/Elliott in a $16.5B all-cash deal, will be merged with Tibco to create SaaS powerhouse

More consolidation is afoot in the world of IT to meet a new demand from enterprises for “one-stop shops” covering a wide range of needs in our hybrid world of work. Citrix, the long-in-the-tooth virtualization giant that had been making a slow transition into cloud computing, is being acquired by PE firms Vista Equity Partners and Evergreen Coast Capital (an affiliate of Elliott Investment Management) for $16.5 billion. Vista plans to combine Citrix with Tibco, which it acquired in 2014 for $4.3 billion. The all-cash deal will include the assumption of Citrix’s debt, the companies say.

The deal comes after a long period of speculation over the company — Citrix has been looking at strategic options for at least the last five months — which culminated in the last month with reports that Vista and Elliott, with the most recent speculation being that they would acquire the company for $13 billion

Citrix is currently traded on Nasdaq and the deal will see the company go private. Citrix shareholders, the company said, will receive $104.00 in cash per share, a premium of 24% over the closing price on December 20, 2021, “the last trading day prior to media reports regarding a potential bid from Vista and Evergreen.” Evergreen, it should be noted, was already an investor in Citrix prior to this deal.

PE firms, similar to VCs, are sitting on massive funds at the moment that they need to invest. One obvious move to address that is to scoop up large technology businesses that are in need of restructuring and consolidating.

Bringing Citrix together with Tibco could see analytics from the latter cross-sold with virtualization and cloud computing services from the former, at a time when many buyers — that is, enterprises — are looking for more simplified supplier partnerships and better financial around IT services for increasingly-remote workforces in the wake of the COVID-19 pandemic.

It also gives the combined company a hefty business from day one: It will have 400,000 customers, including 98% of the Fortune 500, Citrix said, in total with 100 million users in 100 countries.

“Over the past three decades, Citrix has established itself as the clear leader in secure hybrid work. Our market-leading platform provides secure and reliable access to all of the applications and information employees need to get work done, wherever it needs to get done. By combining with TIBCO, we will expand this platform and the outcomes our customers achieve,” said Bob Calderoni, chair of the Citrix board of directors and interim chief executive officer and president, in a 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.”

Vista and Citrix have had something of a revolving door prior to this deal: The company paid $2.25 billion to acquire project management platform Wrike from the PE firm a year ago. Tibco had also been the subject of sell-off speculation itself, although it seems that Vista decided to take another route: Combining it with Citrix could be a more interesting use of the asset that speaks to how enterprises are evaluating and buying IT today.

“There has never been a better time to be in the business of connected intelligent analytics, and we’re thrilled to bring our industry-leading solutions to Citrix’s global customers,” said Dan Streetman, CEO of TIBCO, in a statement. “The workplace has changed forever, and companies everywhere will require real-time access to faster, smarter insights from the increasingly large volumes of data available to them, their employees, and their ecosystems. I couldn’t be more excited about our combined vision and look forward to a strong partnership.”

“We have always viewed Citrix as a true technology pioneer, building and defining so many categories that have changed the landscape of the industry,” said Monti Saroya, co-head of Vista’s Flagship Fund and senior managing director, 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.”

More to come.