Elliott Investment Management, and Vista Equity Partners agreed to acquire software maker Citrix Systems for $13bn (€11.6bn), marking the first big leveraged buyout of the year.
Vista and Elliott's private equity arm, Evergreen Coast Capital Corp, are paying $104 per share in cash, according to a statement from the companies, confirming an earlier report by Bloomberg News. The offer is a 30pc premium to the company's closing share price on December 7, before market speculation emerged about a deal. Bloomberg News first reported on a potential agreement with Vista and Elliot on December 20.
Citrix shares were down about 3.7pc at $101.6 on Monday in New York. The stock closed at $105.55 on Friday, giving the company a market value of about $13.2bn.
Fort Lauderdale, Florida-based Citrix makes software that workers use to log on to their corporate programs virtually, a category of product extensively relied upon during the pandemic as businesses sought quick ways to keep remote workforces connected to central operations. Many are now planning permanent hybrid setups for home and office working, which is expected to grow the market for tools that help make this seamless.
As part of the transaction, Vista and Evergreen plan to combine Citrix with Tibco Software, an enterprise data management firm that's one of Vista's portfolio companies.
The combination will create one of the world's largest software providers, serving 400,000 customers, according to the statement.
The Citrix agreement caps the biggest-ever month for software deals and follows a rampant year in which private equity firms and strategic buyers chased targets.
The value of transactions in the sector hit a record $674bn in 2021, almost double the previous annual high, data compiled by Bloomberg shows.
Values are up 144pc this year, driven by Microsoft's mammoth $6bn takeover of video game publisher Activision Blizzard.
Citrix previously tried to sell itself in 2017 only to see discussions with potential buyers, including Bain Capital and Thoma Bravo, stall over valuation, people familiar with the matter said at the time. Citrix's most recent sale considerations came as Elliott took a 10pc stake in the company, its second time investing in the workplace software maker.
The deal values Citrix at about 24.8 times its trailing 12-month earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. That's just a little below the median 25.8-times Ebitda paid for similar legacy tech companies over the past five years.
"Given Citrix faces a tough business-model transition, the company may have garnered a full valuation from Elliott and Vista," Bloomberg Intelligence senior analyst Woo Jin Ho wrote in a note. "Yet Elliott and Vista's acquisition also implies limited interest from larger, publicly held suitors."