Investment management company Elliott Management Corp and investment firm Vista Equity Partners are reportedly nearing a deal to acquire Citrix Systems Inc. Sources with knowledge in the matter said the deal to take the cloud computing private could value it at around $13 billion.
The same sources claimed that the deal could be announced by the companies anytime this week. The deal comes just after Elliott Management and Vista Equity had managed to secure funding from the loan market to buy Citrix.
The two companies are reportedly prepared to pay $104 per share to take Citrix private. The bid is slightly lower than Citrix's current stock value, which closed at $105.55 on Friday. However, it still represents a premium over the company's stock price in December.
Once the acquisition is made, Vista reportedly plans to merge Citrix with Tibco, another cloud computing and data analytics company it had previously acquired. While other cloud computing companies were able to increase their growth during the pandemic as more people shifted to work-from-home arrangements, Citrix had failed to generate any substantial profits.
Citrix interim Chief Executive Robert Calderoni said at the company's latest earnings call that they weren't able to report increased profits over the past year because the company had spent too much of its revenues on its sales force and not on its distribution partners.
Calderoni temporarily took over as CEO of the company when David Henshall stepped down last month. Henshall served as the company's CEO since 2017.
In its last quarterly report, the company generated an operating income of $84.5 million. The figure was significantly lower than the profits it had reported over the same period a year earlier. The company attributed its lower earnings to increase operational expenses.
The company mainly supplies software and services that allow large companies to set up private networks that are remotely accessible. Throughout the pandemic, the company was able to increase its revenues as demand for its cloud services soared. However, analysts said Citrix had struggled to transition to a subscription-based business, which was what its rivals were doing to keep with the retail market demand.
Elliot Management had been gradually increasing its stake in Citrix with the intention of fully acquiring the company. Sources said Elliott Management had been looking for a partner to help it acquire Citrix since October of last year. Elliott Management had appointed its managing partner, Jesse Cohn, to Citrix's board of directors in 2015. Cohn had stepped down from his position last year.
