Citrix Systems Goes Private in $16.5 Billion Deal

Citrix Systems is being acquired by Vista Equity Partners and Evergreen Cost Capital Corp., the private-equity division of Elliott Management Corp., in an all-cash leveraged buyout deal that is valued at $16.5 billion, including debt. Vista and Evergreen are paying $104 per share, a 30% premium to the company’s closing share price before news of the deal was leaked in December. This deal marks the first large LBO of 2022, following a spree of big deals from private equity firms last year.

What’s Next for Citrix?

Citrix Systems is a software and cloud-computing company that offers users remote access to virtual applications, desktops, and other resources. Citrix’s technology services were especially relied upon during the pandemic as they allowed workers to log onto their corporate programs remotely. This market is expected to grow even larger as many businesses are transitioning to permanent hybrid setups for home and office work, keeping remote workers connected to central operations.

Vista Partners and Evergreen Coast Capital plan to merge Citrix with Tibco Software, an enterprise data management firm that is part of Vista’s portfolio company. In doing so, the private equity firms will be creating one of the world’s largest software providers with over 400,000 customers and 100 million users across 100 countries.

What is Fueling Big Leveraged Buyouts?

In 2021, private equity firms reported $944.4 billion worth of deals in the U.S. alone, which was 2.5 times more than in 2020, and more than double the previous peak in 2007. $674 billion of those deals come from deals in the software sector. The rise in private equity funding is being fueled by institutions such as pension funds looking for higher returns in a time when interest rates are low. There seems to be high expectations for growth in the software industry which means that private equity firms will be continuing their search for big leveraged buyout deals.