The software company Citrix is nearing a $13bn deal to be taken private, in what would be the biggest leveraged buyout in months following a slump in public technology stocks.
Citrix is close to an agreement to be sold to Elliott Management and Vista Equity for $104 per share, according to people briefed on the discussions. The company and Elliott did not respond to emails seeking comment, and Vista declined to comment.
The deal would be one of the largest tech buyouts on record and cap a years-long tussle with Elliott, which began agitating for changes at the company after investing in 2015.
It would also mark the first buyout of 2022 worth more than $10bn following a year in which a record $1.1tn in private equity takeovers was struck, according to PitchBook data.
Elliott’s Evergreen Coast Capital private equity arm participated in some of last year’s biggest deals, including a $17bn sale of Athenahealth alongside Veritas Capital to a consortium of private equity buyers.
Vista, with $86bn in assets under management, has been one of the private equity industry’s most active investors in software buyouts. The firm, led by billionaire Robert Smith, has already announced about nine deals this year, according to PitchBook data.
Citrix’s software allows employees to securely work from any of their devices remotely, an area that has benefited from rising demand during the pandemic.
However, Citrix has stumbled in making the transition to remote cloud storage and a subscription-based business model, a common struggle for older tech companies.
David Henshall, former Citrix chief executive, stepped down in October following consecutive quarters of missed sales targets. Citrix board chair Bob Calderoni, a former chief executive of the software company Ariba, replaced Henshall on an interim basis.
Citrix paid about $2.3bn in cash last year to acquire Wrike, a workplace collaboration software company backed by Vista. In 2017, Citrix sold its GoTo service business to LogMeIn, a business that was taken over by Elliott’s Evergreen Coast arm and buyout firm Francisco Partners for $4.3bn in August 2020.
The deal would come in the middle of a turbulent period for publicly traded tech companies.
Shares in cloud software companies have fallen by one-third in the past three months, according to the BVP Nasdaq Emerging Cloud Index, with US investors fearing a cycle of interest rate rises to deal with rising inflation.
Bloomberg first reported in December that Elliott and Vista were considering a joint bid for Citrix. Shares in the company have risen by more than one-quarter since the initial report and ended trading at $105.55 on Friday.