Report: Citrix to become private company again in $13B sale

Citrix Systems Inc. is on the verge of becoming a private company again following sustained pressure from the activist investor Elliott Management Corp.

A report in the Wall Street Journal today said Elliott’s private equity firm Evergreen Coast Capital and Vista Equity Partners are close to agreeing a $13 billion deal to buy the publicly traded software company.

The Journal cites people familiar with the matter as saying a deal could be announced as early as Monday, though the talks could still fall apart or be delayed.

Citrix sells software that enables workers to remotely access business applications and virtual desktops. The company also has a presence in several other parts of the enterprise technology market. For instance, it sells a project tracking platform that business teams use to keep track of outstanding tasks, as well as software tools that help information technology departments secure their firms’ business data and optimize networking infrastructure.

Like many legacy software companies, Citrix has struggled with the transition to a subscription-based business model and though it has had a boost recently thanks to the COVID-19 pandemic, investors such as Elliott believe the company continues to underperform.

Elliott has felt that way for quite a while. The activist investor, which has a history of buying sizable stakes in tech firms and agitating for change to make them more profitable, first bought shares in Citrix in 2015.

It expanded its stake in the company considerably last September, spending $1.3 billion to acquire more than 10% of its shares. Since then, Elliott has pushed for a number of changes, resulting in David Henshall stepping down as Citrix’s president and chief executive officer in October. The company then hired Chairman Bob Calderoni as its interim CEO.

The Journal said the market has responded well to the reported takeover, with Citrix’s stock closing at $105.55 Friday.

Elliott, which is best known for its efforts to disrupt Dell Technologies Inc.’s $67 billion acquisition of EMC Corp. in 2016, has acquired a number of other companies in the past after previously acquiring a stake in them. The most notable example is Athenahealth Inc., which Elliott and Veritas Capital acquired in 2018. They finally agreed to sell the company in September.

If the buyout of Citrix goes ahead, the Journal said it’s likely to be combined with the business intelligence firm Tibco Software Inc., which Vista already owns.

Photo: Citrix