Business software company Citrix Systems, a major employer in downtown Raleigh, is reportedly working with investment banking firm Goldman Sachs on a possible sale of the business.
Bloomberg News and Reuters, both citing unnamed sources familiar with the matter, reported that the Fort Lauderdale, Fla.-based company has asked the investment bank to explore a sale. Reuters reported that Goldman is looking into other strategic alternatives as well.
Citrix shares rose 7 percent Monday on the news of a possible sale, but on Tuesday they closed at $82.02, down 3 percent. Over the past 12 months, the stock had risen more than 30 percent through the end of last week.
Citrix has 900-plus workers in downtown Raleigh's Warehouse district and in December committed to adding 400 new hires locally over the next five years. The company established its local presence in 2011 when it acquired a startup, ShareFile, for $54 million.
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A Citrix spokesperson couldn’t be reached for comment. Reuters reported that Citrix declined to comment.
Mizuho Securities analyst Abhey Lamba speculated in a research note Tuesday that a sale is a possibility but “given the challenges involved in putting together a large deal like this, we think there is still a lot of uncertainty involved.”
“We believe the company has likely explored strategic options as part of its overall review process over the last couple of years but there was no clear buyer,” Lamba noted.
But, he added, that was before the company divested a few businesses and completed a spinoff of its GoTo business, a suite of products that include the online meeting software GoToMeeting, into a joint venture with competitor LogMeIn. As a result, “the company presents a lot cleaner story” that could be attractive to a financial buyer, such as a private equity firm, that “can potentially make the acquisition work with incremental cost cuts.”
Lamba calculates that Citrix could fetch $95 to $100 per share.
Reuters reported that several private equity firm recently contemplated acquiring Citrix but concluded that a leveraged buyout wouldn’t be profitable.
However, Reuters’ sources also said one buyout firm, Thoma Bravo, remains interested in a deal.
ShareFile founder Jesse Lipson recently announced that he planned to depart from Citrix, where he is corporate vice president and general manager of the cloud services business unit that includes ShareFile, at the end of this month.
At the time, Lipson said in an interview that he was confident that the momentum at Citrix’s Raleigh office would continue after he leaves.
“We’ve got some strong leaders in place in Raleigh ... who will be stepping up to continue to run the ShareFile business,” he said.
Last year Citrix generated net income of $536 million, or $3.41 per share, on revenue of $3.42 billion.