What Happens to Citrix Stock After the Private Equity Acquisition?

Rachel Curry - Author
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Jan. 31 2022, Published 10:41 a.m. ET

Blue-chip company Citrix Systems, Inc. (CTXS) has finalized a deal to sell its operation to a pair of private equity firms. The move comes after the company’s 26th year on the market. The acquisition solidifies the next step for cloud computing and workspace solutions.

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What will happen to Citrix stock after its acquisition? Let’s dig in and see what CTXS shareholders can expect.

Citrix Systems sells to private equity firms for $16.5 billion.

Cloud computing and all-in-one workspace solutions business Citrix Systems has announced the sale of its lifetime. A pair of private equity firms, Vista Equity Partners and Evergreen Coast Capital, are acquiring the company for $16.5 billion.

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Citrix, which has been publicly traded since 1995, held a $12.7 billion market capitalization as of the market open on Jan. 31.

Vista Equity is a global investment firm with a focus on enterprise software, data, and tech-enabled businesses. It owns companies like MindBody and Marketo. Evergreen Coast is an affiliate of Elliott Investment Management L.P. The deal includes the purchase of Citrix debt.

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CTXS stock will go private after the Citrix acquisition.

According to the terms of the deal, CTXS stock will go from public to private. Officially announced in pre-market hours on Jan. 31, the acquisition will lead to a buyout of Citrix stock at a value of $104 per share. That's a premium of about 4 percent to the stock’s low on Jan. 28 of just over $100.

Due to the rumored deal negotiations prior to the definitive agreement, CTXS stock rose as much as 5.5 percent on Jan. 28 before leveling out with a nearly 3.7 percent drop early on Jan. 31. Prior to deal negotiation speculation in early December, Citrix stock was nearly 30 percent lower.

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Citrix will combine with TIBCO Software.

The agreement states that Citrix will combine with TIBCO Software, a Vista portfolio company. According to Citrix, “The combination brings together Citrix’s secure digital workspace and application delivery suite with TIBCO’s real-time intelligent data and analytics capabilities to empower customers and users with the secure application and information access and insights they need to accelerate digital transformation and navigate the hybrid workplace.”

Together, Citrix and TIBCO will serve 400,000 customers and 98 percent of Fortune 500 companies.

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Citrix board chair Bob Calderoni said that the final agreement is a result of five months of negotiation. TIBCO CEO Dan Streetman added, “There has never been a better time to be in the business of connected intelligent analytics.”

Citrix stock is going private and shareholders will receive a cash payout.

Citrix stock will go private after the transaction closes. Executives expect this to happen by mid-year, but it's subject to conditions like shareholder and regulatory approval. At that time, shareholders will receive a cash payout at the value of $104 per share. Until then, the stock will likely hover around the current value of $101.50 as of the morning of Jan. 31.

According to Citrix Systems’ fourth-quarter earnings results for fiscal 2021, the company earned $851 million in revenue, up 5 percent YoY. Now, private equity firms Vista Equity Partners and Evergreen Coast Capital have an ownership stake in that growth.

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