Citrix Systems Inc. (NASDAQ: CTXS) announced that it has signed a definitive agreement to acquire Wrike, a recognized and rapidly growing leader in the SaaS collaborative work management space, for US $ 1.25 billion 2.25 billion in cash. Citrix also released fourth quarter and fiscal year ended December 31, 2020 earnings and posted additional materials, including a return letter and a presentation to investors, on its Investor Relations website. http://www.citrix.com/investors. .
The acquisition will bring digital work platform Citrix, which securely provides the resources an employee needs to be productive in a unified experience, and work management solution from Wrike, which streamlines collaboration and task execution, providing employees with additional tools to work efficiently and safely wherever they are. The addition of the capabilities provided by the Wrike cloud will accelerate the transition from Citrix's business model to the cloud and the strategy of becoming a complete SaaS-based work platform, meeting the needs of various functional groups within the company.
The combined company will offer customers an enhanced value proposition through complementary solutions, bringing new revenue opportunities to existing customer bases and new lines of business shopping centers, including marketing, professional services and HR. Together, Citrix and Wrike will serve more than 400,000 customers in 140 countries. In addition, after closing, Wrike will have access to the robust partner ecosystem Citrix, creating new opportunities to generate additional value for customers.
Headquartered in San Jose, California, and employing more than 1,000 employees, Wrike, a company in the Vista Equity Partners portfolio, provides approximately 18,000 customers globally with solutions that empower teams and distributed workers to plan, manage and complete work at scale efficiently. Wrike is expected to have approximately 30% of autonomous growth between US $ 180 million and US $ 190 million in recurring annual revenue (ARR¹) from unaudited SaaS in 2021, with the opportunity to accelerate growth over time under ownership from Citrix.
“When it comes to the future of work, Citrix and Wrike share a common vision and mission: to reduce the complexity and chaos of work and to empower each person, team and organization to achieve their best. Together, we will open the workspace of the future, truly transforming the work experience and equipping people with an innovative set of solutions that they can use to exceed goals and keep business moving forward, ”said Andrew Filev, founder and CEO of Wrike .
Financial Details
Wrike ended 2020 with over $ 140 million in unaudited SaaS ARR, reflecting more than 30% CAGR in SaaS ARR over the previous two years. The company is expected to have approximately 30% of autonomous growth for between US $ 180 million and US $ 190 million in SaaS ARR1 in 2021, with the opportunity to accelerate growth over time under the ownership of Citrix. The addition of Wrike is highly complementary to Citrix's existing customer base and is expected to accelerate the company's SaaS ARR growth.
Financial and accounting impacts of the purchase for deferred revenue will affect non-GAAP earnings per share in 2021. Integration and other acquisition-related costs are expected to be modestly diluting non-GAAP earnings per share in 2021. The transaction should be neutral for Citrix 2022 fiscal year non-GAAP earnings per share and free cash flow, and accretive thereafter.
Citrix expects to fund the transaction with a combination of new debt and existing cash and investments. Citrix is committed to its investment grade credit ratings and plans to return to historic leverage levels within 24 months. The company obtained a commitment from JPMorgan Chase Bank, NA for a 364-day senior unsecured bridging loan of $ 1.45 billion.
Advisors
JP Morgan Securities LLC is acting as financial advisor to Citrix in the transaction and Shearman & Sterling LLP as legal advisor. Wrike's financial advisor is Goldman Sachs Group & Co. LLC, and the legal advisor is Kirkland & Ellis LLP.
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