CVT - CTXS Stock Alert: 10 Things to Know About the Deal Taking Citrix Systems Private

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Citrix Systems (NASDAQ:CTXS) is a company that may soon be taken off the Nasdaq exchange. That’s because it was recently announced that Elliot Management’s private-equity arm, Evergreen Coast Capital and Vista Equity Partners have agreed to take Citrix private. The transaction holds an enterprise value of $16.5 billion, which includes the value of debt. Furthermore, shareholders of CTXS stock will receive $104 per share, which is lower than last Friday’s closing price of $105.55.

Citrix is an information technology company that provides cloud computing and digital workspace services. As part of the deal, Vista and Evergreen are planning on combining Citrix with Tibco, a business intelligence company owned by Vista. The combination will create a company that boasts over 400,000 customers and 100 million users in 100 countries. Additionally, the combined company will keep the Citrix name and will likely close “near the middle of 2022.”

So, what else should investors know about this multi-billion dollar transaction? Let’s jump right in.

CTXS Stock: What to Know About the Vista and Evergreen Buyout

1. Citrix released its Q4 results today. During Q4, Citrix reported revenue of $851 million, up 5% from $810 million year-over-year (YOY). However, revenue for the full fiscal year 2021 came in at $3.22 billion, which was down 1% YOY.
2. Subscriptions make up a majority of Citrix’s revenue, with support and services falling in second.
3. Additionally, Citrix confirmed in its earnings report that it had “entered into a definitive agreement to be acquired by an affiliate of Elliott Investment (1) Management L.P. and Vista Equity Partners.”
4. Citrix interim CEO Robert Calderoni admitted that Citrix “failed to capitalize on the rise of remote working during the Covid-19 pandemic because it spent too much on its salesforce and too little on its distribution partners.”
5. With interest rates near historic lows, the private equity industry is flush with cash and eager to score on deals.
6. Vista Equity boasts an assets under management (AUM) of $86 billion and has engaged in over 580 private equity transactions.
7. Furthermore, Vista’s current portfolio of companies include Cvent (NASDAQ:CVT), Dispatch and Greenway Health. The firm has “never lost money on a buyout.”
8. However, Vista’s CEO, Robert Smith, was involved in criminal tax evasion during 2020. Smith eventually reached a $140 million non-prosecution settlement with the Department of Justice (DOJ).
9. Elliot Management manages roughly $48 billion in AUM and was founded in 1977.
10. Past investments of Elliot’s private-equity arm include DreamBox Learning, Coveo and Travelport.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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