Citrix Systems Inc. said on Monday, Jan. 19, it agreed to buy Vista Equity Partners Management LLC portfolio company Wrike Inc. for $2.25 billion in cash.
Fort Lauderdale, Fla.-based Citrix said the deal for the work management software company will boost its business as a provider of a “cloud-delivered digital workspace experience” across any channel, device or location.
The deal comes after Vista Equity acquired Wrike in November 2018, from TMT Investments plc. At the time, the company’s existing investors — including Bain Capital Ventures LLC and Scale Venture Partners — retained a stake in the company.
Shares of Citrix rose 3% to $136.04 on Monday.
San Jose, Calif.-based Wrike currently employs more than 1,000 people, with 18,000 customers for its software that helps teams and distributed workers plan, manage and complete work at scale.
Citrix Systems said the deal will boost the target’s annual software-as-a-service revenue to between $180 million and $190 million in 2021.
Citrix president and CEO David Henshall led the deal, along with Wrike CEO and founder Andrew Filev. Filev will continue to lead the company and report to Citrix CFO Arlen Shenkman.
Citrix plans to fund the deal with a combination of new debt and existing cash.
UBS AG analyst Karl Keirstead said he’s mixed on the acquisition given that Citrix needs to acquire to expand the portfolio and address a larger market beyond desktop.
“On the other hand, the synergies with the core Workspace product are interesting but not particularly obvious or compelling, the project management software space is already relatively crowded, Citrix hasn’t done much with previous SaaS efforts and an acquisition could dilute margins and free cash flow,” Keirstead said.
The company said it inked a $1.45 billion senior secured bridge loan commitment from JPMorgan Chase Bank NA.
The board of Citrix and Wrike have already approved the deal, which is expected to close in the first half of 2021.
Internally, Citrix chief legal officer Tony Gomes handled the transaction.
At Vista Equity Partners, chief operating and legal officer David Breach, general counsel Christina Lema, senior managing director Patrick Severson and managing director Ryan Atlas worked on the deal.
JPMorgan Securities LLC is financial adviser to Citrix, with Shearman & Sterling LLP’s Daniel Mitz and Alain Dermarkar as legal counsel.
Goldman Sachs Group & Co. LLC advised Wrike along with Kirkland & Ellis LLP’s David Dixon and Ari Levi.
Citrix Systems in 2015 reached a settlement with activist hedge fund Elliott Management Corp. to remove its CEO, sell a key unit and name a dissident board member.
Elliott’s Jesse Cohn was on Citrix’s board from July 2017 to June 2020, according to BoardEx. The current Citrix board chair Bob Calderoni is an Elliott ally.
— David Marcus, Chris Nolter and Ron Orol contributed
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