Sun Sentinel Palm Beach Edition
Stock soars on bids for Lauderdale’s Citrix
Citrix Systems is South Florida’s oldest technology company with 1,700 employees in the region.
Citrix Systems stock rose nearly $6 a share on a report that three private equity firms have bid for the Fort Lauderdale-based software company. Citrix has about 1,700 employees in the area.
Citrix Systems’ stock soared nearly $6 a share Wednesday on a published report that three private equity firms have bid for the Fort Lauderdale-based software company.
The stock closed at $87.05 up 7.09 percent in Nasdaq trading.
Bain Capital, The Carlyle Group and Thoma Bravo submitted bids last week, according to Bloomberg, which cited sources familiar with the deal. Washington D.C.-based Carlyle declined to comment Wednesday. Boston-based Bain also said it had no comment. Chicagobased Thoma Bravo didn’t respond to a request for comment.
Citrix is South Florida’s oldest technology company with 1,700 employees in the region. When asked about the buyout report, Citrix spokesman Eric Armstrong said the company doesn’t comment on rumors.
But at least one securities analyst who follows the company said Wednesday that a sale to private investors would make sense for Citrix because it is moving to a subscription-based revenue model to deliver services via the cloud or access over the internet. Citrix is a leader in providing tools that allow users to access documents or data on any device, at anytime from anywhere. Today, customers want that access over the internet and via mobile phones, rather than through a company’s computer servers.
That change in booking revenue could hurt its financials, said Rob Oliver, analyst for Robert W. Baird & Co. in New York City.
CEO Kirill Tatarinov and his predecessors have “tightened up the business and grown the margins,” Oliver told the Sun Sentinel.
“Citrix is pivoting to revenue growth and that’s going to be challenging. This is a big company transitioning toward more of a subscription business and they could do that more effectively as a private company,” Oliver said.
“This is buyer-driven. IT buyers today don’t want the old fashioned, ‘I buy the software and don’t see my sales person ever again.’ They want a subscription model where there is a partnership between creator and company,” he said.
Oliver said a deal is likely to involve multiple buyers because Citrix is so large. Citrix has a market value of about $12.3 billion.
While all the private equity bidders “make sense,” Oliver said, Thoma Bravo has been one of the prime investors in software companies.
Also on Wednesday, Thoma Bravo announced its acquisition of Lexmark’s Enterprise Software business in Lexington, Ky. Last year, Thoma Bravo acquired Pennsylvania software company Qlick. Elliott Management Corp., a New Yorkbased activist investment firm that owns nearly 9 percent of Citrix stock, had earlier bought a in the company.
Thoma Bravo also has a personal connection to Citrix: Thoma Bravo operating partner David Weiss was formerly vice president of worldwide marketing for Citrix.
It’s also possible that Citrix may decide not to pursue a sale or go with a corporate bidder, the Bloomberg report said. Some analysts have pointed to a potential deal with Microsoft, which has been a longtime Citrix partner, a relationship strengthened by Tatarinov.
Citrix has been undergoing a multi-year restructuring, recently completing the sale of its GoTo family of businesses to Bostonbased LogMeIn. The sale of certain parts of the business was pushed by Elliott Management Corp
On May 21-25, Citrix is scheduled to hold Citrix Synergy 2017 in Orlando, an annual event where the CEO and other speakers update users on the company’s vision and technology.