Transaction unites leading workspace delivery
platform with best-in-class SaaS work management solution, ushering
in new era of employee productivity
Combination accelerates Citrix’s business model
transformation strategy and enhances overall future growth
expectations
Company to host conference call and webcast to
provide transaction details and discuss fourth quarter and fiscal
year 2020 financial results at 8:15 a.m. ET today
Citrix Systems, Inc. (NASDAQ:CTXS), today announced that it has
entered into a definitive agreement to acquire Wrike, a rapidly
growing, recognized leader in the SaaS collaborative work
management space, for $2.25 billion in cash. Citrix today also
reported earnings for the fourth quarter and fiscal year ended
December 31, 2020 and has posted additional materials, including an
earnings letter and investor presentation, on its Investor
Relations website at http://www.citrix.com/investors.
The combination will bring together Citrix’s powerful digital
work platform, which securely delivers the resources an employee
needs to be productive in one unified experience, and Wrike’s
innovative work management solution, which streamlines
collaboration and work execution, providing employees with
additional tools to work efficiently and securely wherever they may
be. The addition of Wrike’s cloud-delivered capabilities will
accelerate Citrix’s business model transition to the cloud and
strategy to become a complete SaaS-based work platform addressing
the needs of various functional groups within the enterprise.
The combined company will offer customers an enhanced value
proposition through complementary solutions, unlocking new revenue
opportunities both within existing installed customer bases and new
lines of business buying centers, including marketing, professional
services, and HR. Together, Citrix and Wrike will serve over
400,000 customers across 140 countries. In addition, upon closing,
Wrike will gain access to Citrix’s robust ecosystem of partners,
creating new opportunities within the ecosystem to drive additional
value for customers.
Headquartered in San Jose, California, and employing more than
1,000 employees, Wrike, a Vista Equity Partners portfolio company,
provides approximately 18,000 customers globally with solutions
that empower teams and distributed workers to plan, manage and
efficiently complete work at scale. Wrike is expected to have
approximately 30 percent stand-alone growth to between $180 million
and $190 million in unaudited SaaS annualized recurring revenue
(ARR1) in 2021, with the opportunity to accelerate growth over time
under Citrix’s ownership.
Delivering the Future of Work
“Work today is happening everywhere – at home, in the office and
on the road. We believe that in the future, success will go to
those companies that can support flexible and hybrid work models
and provide a consistent, secure and efficient experience that
removes the complexity and noise from work so employees can focus
and perform at their best, wherever they happen to be,” said David
Henshall, President and CEO, Citrix. “Together, Citrix and Wrike
will deliver the solutions needed to power a cloud-delivered
digital workspace experience that enables teams to securely access
the resources and tools they need to collaborate and get work done
in the most efficient and effective way possible across any
channel, device or location.”
Expanding the Digital Workspace
Citrix provides a market-leading digital work platform from
which companies can deliver unified, secure and reliable access to
the systems, information and tools people need to get work done
wherever they may be working. With the addition of Wrike’s
offerings, Citrix will expand its platform to include new,
collaborative work management capabilities that enable companies to
simplify work execution and boost employee effectiveness and
productivity by automating and streamlining team collaboration as
well as unifying workflows across all employees and work
styles.
“When it comes to the future of work, Citrix and Wrike share a
common vision and mission: to reduce the complexity and chaos of
work and empower every person, team, and organization to achieve
their very best. Together, we will unlock the workspace of the
future, truly transforming the work experience and equipping people
with an innovative set of solutions they can use to exceed goals
and keep business moving forward,” said Andrew Filev, Founder and
CEO, Wrike.
Financial Details
Wrike ended calendar year 2020 with more than $140 million in
unaudited SaaS ARR, reflecting more than 30 percent CAGR in SaaS
ARR over the prior two years. The company is expected to have
approximately 30 percent stand-alone growth to between $180 million
and $190 million in SaaS ARR1 in 2021, with the opportunity to
accelerate growth over time under Citrix’s ownership. The addition
of Wrike is highly complementary to Citrix’s existing customer base
and is expected to accelerate Citrix’s SaaS ARR growth.
Financing and purchase accounting impacts to deferred revenue
will affect 2021 non-GAAP earnings per share. Integration and other
costs related to the acquisition are expected to be modestly
dilutive to non-GAAP earnings per share in 2021. The transaction is
expected to be neutral to Citrix’s fiscal year 2022 non-GAAP
earnings per share and free cash flow, and accretive
thereafter.
Citrix expects to fund the transaction with a combination of new
debt and existing cash and investments. Citrix is committed to its
investment grade credit ratings and plans to return to historical
leverage levels within 24 months. Citrix has obtained a commitment
from JPMorgan Chase Bank, N.A. for a $1.45 billion senior unsecured
364-day bridge loan facility.
The transaction, which has been unanimously approved by the
board of directors of both Citrix and Wrike, is expected to close
in the first half of 2021, subject to regulatory approvals and
other customary closing conditions. Until close, the companies will
continue to operate independently. Upon closing, Filev will
continue to lead the Wrike team and report to Arlen Shenkman, EVP
and Chief Financial Officer, Citrix.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor to
Citrix on the transaction and Shearman & Sterling LLP as legal
counsel. The financial advisor to Wrike is Goldman Sachs Group
& Co. LLC, and legal counsel is Kirkland & Ellis LLP.
Conference Call Information
Citrix will host a call for financial analysts and investors at
8:15 a.m. ET today to discuss this transaction and its earnings for
the fourth quarter and fiscal year ended December 31, 2020. The
call will be accessible by visiting the Investor Relations section
of the Citrix corporate website at http://www.citrix.com/investors,
where the fourth quarter and fiscal year 2020 earnings letter
discussing financial results, quarterly highlights, and business
outlook, and an investor presentation have been posted.
About Citrix
Citrix (NASDAQ: CTXS) builds the secure, unified digital
workspace technology that helps organizations unlock human
potential and deliver a consistent workspace experience wherever
work needs to get done. With Citrix, users get a seamless work
experience and IT has a unified platform to secure, manage, and
monitor diverse technologies in complex cloud environments.
For Citrix Investors:
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 and of Section 21E of the Securities
Exchange Act of 1934. The forward-looking statements in this press
release do not constitute guarantees of future performance. Those
statements, which are not strictly historical statements,
including, without limitation, statements regarding the proposed
business combination; the benefits of the business combination
including, the expansion of Citrix’s platform, acceleration of
Citrix’s business model transformation, enhancement of growth
expectations, the solutions that the combined companies can
deliver, the ability to transform the work experience, the
potential customers that the combined companies can serve, the
potential expansion of Citrix’s partner ecosystem, the potential
value creation as a result of combined offerings and expected
growth in Annualized Recurring Revenue; expectations regarding new
debt; commitment to investment grade credit ratings and plans to
return to historical leverage ratios; expectations regarding the
impact of the transaction on Citrix’s non-GAAP earnings per share
and free cash flow; and the expected timing of the proposed
transactions, constitute forward-looking statements. Such
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those anticipated by the forward-looking statements,
including, without limitation, the ability of Citrix and Wrike to
close the announced transaction; the ability of Citrix to realize
the potential benefits of the acquisition of Wrike; the possibility
that the closing of the transaction may be delayed; customer
acceptance of Citrix and Wrike offerings; potential disruptions to
Citrix’s and Wrike’s operations, distraction of management and
other risks related to Citrix’s integration of Wrike’s business,
team, and technology; the ability of Citrix’s sales professionals
and distribution partners to sell Wrike’s product and service
offerings; the ability of Wrike to retain key customers
post-transaction, and to achieve the anticipated rate of growth in
Annualized Recurring Revenue; risks related to the debt financing
of the acquisition consideration; the impact of the global economy,
political environment, and uncertainty in IT spending; revenue
growth and recognition of revenue; products and services, their
development and distribution; demand and pipeline risks; economic
and competitive factors, risks related to Citrix’s key strategic
relationships; and other risks detailed in Citrix’s filings with
the Securities and Exchange Commission. Citrix assumes no
obligation to update any forward-looking information contained in
this press release or with respect to the announcements described
herein.
About non-GAAP financial measures
Free cash flow is operating cash flow determined in accordance
with accounting principles generally accepted in the United States
(GAAP) less capital expenditures. Free cash flow is not a measure
of cash available for discretionary expenditures. Non-GAAP earnings
per share differs from GAAP earnings per share in that it excludes
certain GAAP measurements in accordance with Citrix’s past
practices, including stock-based compensation, amortization of
product and other intangible assets, and restructuring charges.
1 ARR does not reflect adjustments to revenue or future
committed revenue that may arise in accounting for a business
combination, and is not intended to be a forecast of future
revenue.
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version on businesswire.com: https://www.businesswire.com/news/home/20210119005249/en/
Media Contact: Karen Master +1 216-396-4683
Karen.master@citrix.com
Investor Contact: Traci Tsuchiguchi
Traci.tsuchiguchi@citrix.com +1 408 790 8467
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