Business software company Citrix Systems, which previously announced plans to spin off its GoTo business into a separate publicly traded company, is instead merging that operation with a competitor: LogMeIn.
The combined company, which will be led by LogMeIn CEO Bill Wagner, will have annual revenue of more than $1 billion and more than 2 million customers, the two companies reported when announcing the deal after the markets closed Tuesday.
Citrix shareholders will receive LogMeIn shares valued at $1.8 billion, based on Monday’s closing price, and will own 50.1 percent of the combined company. The deal has been structured to be tax-free to Citrix and its shareholders.
Mizuho Securities analyst Abhey Lamba wrote in a research note that “the realized value seems inline with our thoughts about the value of the business.”
Boston-based LogMeIn, an online meeting company, generated $271.6 million in revenue in 2015, up 22 percent from 2014. Some of its products are join.me, LastPass, LogMeIn Rescue and BoldChat.
After being pressured by activist investor Elliott Management, Citrix said in November that it was spinning off the GoTo business, a suite of products that include the online meeting software GoToMeeting.
Citrix has more than 600 employees in Raleigh’s Warehouse District, most of whom are connected to the company’s ShareFile business – which is not part of the GoTo operation. Citrix acquired ShareFile, which was based in Raleigh, for $54 million in 2011.
Citrix also reported better-than-expected second quarter results Tuesday.
Citrix reported revenue of $843 million, up from $797 million a year ago. Net income totaled $121 million, or 77 cents per share, versus $103 million a year ago.