Will Citrix finally find a courter?

Kirill Tatarinov - President and CEO of Citrix

Citrix could be having another go at getting itself sold, with fresh reports emerging on 14 March that the software vendor is working with advisors to find potential buyers for its US$13.3 billion business.

According to reports by Bloomberg and Reuters, the communications software and networking solutions company has hired Goldman Sachs Group to identify potential courters for the business, including private equity firms.

The company has gone down this path before, with the company reportedly engaging with buyout firms in late 2015.

At the time, Dell was rumoured to be one of the interested parties looking at potential acquisition of the company.

Dell went on to make tech industry history with its record-breaking US$67 billion acquisition of storage vendor, EMC, which closed in September last year – leaving Citrix untouched.

At the time, it was believed that other interested parties were circling Citrix as well, including private equity investors.

Ultimately, the company’s earlier foray into a potential sale did not result in a sale. Instead, the company moved to spin off and sell some of its business units, including its GoTo collaboration products business, which resulted in a US$1.8 billion merger agreement with LogMeIn in 2016.

The spin-off came after activist hedge fund investor, Elliot Management, reportedly asked the company to cut costs and sell some of its business units after a period of underperformance. Citrix ended up giving Elliot Management a seat on its board in mid-2015.

Elliot Management was also a leading voice behind Samsung’s decision last year to consider splitting into two entities.

While private equity firms may be in the running for this round of Citrix’s sale process, Bloomberg reported that sources with knowledge of the matter say that an increase in the company’s value could make it tricky for a single firm to make a compelling offer.

However, there is potential for multiple private equity players to team up and form a consortium to make a big worthy of a sale.

It remains to be seen whether other technology vendors could be enticed by the prospect of owning Citrix and its remaining product portfolio. If another vendor of Dell’s calibre - such as Microsoft - comes knocking, a swift sale could be on the cards.

No doubt, however, much of the sale process will hinge on Citrix’s financials. If the company’s latest fourth quarter results are anything to go by, the company is seeing its revenue heading in the right direction.

For the fourth quarter of fiscal year 2016, the company achieved revenue of US$908 million, compared to US$905 million in the fourth quarter of fiscal year 2015, while net income for the period was US$200 million, or US$1.26 per diluted share, compared to US$131 million, or US$0.84 per diluted share.

"Overall, 2016 was a great year. We made significant strides in advancing our vision, strategy and culture, while at the same time rapidly expanding profitability and growth in our core business,” said Citrix CEO, Kirill Tatarinov, who spent more than a decade at Microsoft before taking on the lead role at Citrix.

Additionally, the company’s market capitalisation is greater now than the last time it went searching for bidders, but whether this alone will be enough to entice a buyer remains to be seen.

Citrix’s reported move to find a buyer comes as the company’s Channel Sales Manager in Australia and New Zealand, Belinda Jurisic, gets set to depart.

Jurisic, who has been in the local channel chief role since 2013, will leave at the end of March, with the company on the hunt for a replacement.