Citrix Could Be Taken Private In Elliott, Vista Deal: Reports

Citrix’s stock price spiked on the news, up about 12 percent from Monday’s close of $83.68 a share.

Publicly traded Citrix Systems could be taken private in a deal by hedge fund Elliott Management Corp. and Vista Equity Partners, according to multiple media reports. The news comes as Citrix leadership prepares to revamp its partner program in 2022.

Fort Lauderdale, Fla.-based virtualization and cloud technologies vendor Citrix has a market value of more than $10 billion, according to Reuters and Bloomberg. The deal might involve Elliott’s private equity arm and Tibco, a Vista portfolio company.

In 2020, Citrix bought Wrike, a Vista portfolio company, for $2.25 billion. Rumors of Elliott Management seeking ownership of Citrix popped up in the fall following a 16 percent drop in Citrix’s share price year and Elliott Management buying a 10 percent stake in Citrix.

[RELATED: Citrix Exec Vows ‘More Focus On The Channel’ Amid Big Changes]

Elliott Management previously bought a stake in the company in 2015 and Elliott partner Jesse Cohn joined the board. He left in 2020, according to a Citrix statement from the time.

Citrix reportedly explored sales and spin-off strategies in 2017 and 2015. Citrix partners at the time voiced displeasure with Elliott’s 2015 presence to CRN.

Earlier this year, Vista’s Tibco completed its acquisition of business analytics software pioneer Information Builders. Other Vista portfolio companies include Datto and Apptio, according to its website.

In the summer, Elliott Management and Francisco Partners were reportedly interested in selling SonicWall.

Leadership Focused On Channel

As 2021 comes to a close, Citrix leadership has publicly discussed plans to invest in its channel program.

Bob Calderoni, Citrix’s interim president and CEO after David Henshall stepped down in the fall, said during the company’s most recent quarterly earnings call in November that Citrix had “some missteps” in its go-to-market strategy and forecasting, according to a transcript of the call. He said the company “ introduced far too many overlays over the last 12 to 18 months,” with “too many people getting compensated on the same deal.”

He promised “to shore up our channel programs and put in place the right incentives for our channel partners. And we need to focus sales investments on direct selling quota-carrying individuals and eliminate excess investments in overlays and shared commissions.”

“The channel is still there. The channel hasn‘t gone away,” Calderoni said on the call. “They’re not selling somebody else’s products. They’re just focusing on other parts of their business. And like any part of a sales organization, and the channel is part of our sales organization, we want to make it more profitable for them to do business with us.”

He said Citrix has invested in sharing stalled and uncovered pipelines with partners “to give them leads and opportunities for new business,” as well as increasing compensation for channel partners.

Citrix has also worked with partners to transition customers to the cloud. “We think that‘s not only good business for us, but we think there’s really good opportunities for them to expand their business and add more value to their customers if they help them move to our cloud as well,” Calderoni said.

He continued: “We just have to reverse some of the things that we did over the last year or two and make the business more attractive. And just like a sales force, if you make it more attractive to sell something, you‘ll get more of it sold and it’s fixable. It might take a little bit of time before we see the uptick, but I’m pretty confident we will.”

In September, Hector Lima, Citrix’s executive vice president and chief customer officer, told CRN in an interview about Citrix’s investments in revamping its channel program, including making interim channel chief Mark Palomba permanent. Palomba began handling channel chief duties after Bronwyn Hastings left Citrix in May for Google Cloud.

Lima promised investment in a revamped incentives program for partners to make benefits more predictable, help increase the partner role post sale and align partners with Citrix’s priorities, including moving customers to the cloud and packaging more Citrix offerings to create end-to-end digital workspace services.

“One of the things that I’ve heard the most from partners in the ecosystem is that it’s become operationally hard to do business with us,” Lima said. “Simple things like quoting -- you’re getting the right price out the door, things of that nature. We have to make it much, much simpler so that partners can be more autonomous and they don’t have to rely on a Citrix partner manager or a Citrix seller to help them with that. That’s a whole operations piece around tooling, processes, licensing, packaging.”

Mike Hogan, president of Chesterton, Ind.-based Citrix partner Hogan Consulting Group, told CRN in an interview that the new channel leadership and promised channel investments should be positive for his business.

More predictability around how much partners make per deal is one change Hogan hopes to hear about at Citrix’s sales kickoff event that runs Jan. 18 to Jan. 20, he said. He’s already started noticing more collaboration from Citrix field sales personnel in the past couple of months.

“I think that they’re looking at it saying, ‘We need to be more flexible with the construct we have now so that we can start increasing profitability to our partners,’” Hogan said. “I believe that we’ve got really good people that are in the right positions now to make some real positive change for the partners, and I’m excited about that.”

The company’s shares traded at about $94 a share Tuesday morning, up about 12 percent from Monday’s close of $83.68 a share.

That $94 a share is down from a five-year high of about $152 in July 2020 and close to levels seen in August of 2019.