Citrix CEO Exits Amid Potential Software Company Sale

David Henshall, formerly CEO, Citrix Systems

Citrix Systems CEO David Henshall has exited the software company amid speculation that Citrix could be up for sale. Chairman Bob Calderoni has been named interim CEO and president, effective immediately.

Citrix in September 2021 began exploring a potential company sale, according to reports at the time. The move comes amid multiple pressure points for Citrix. The company’s desktop as a service (DaaS) and virtual desktop infrastructure (VDI) are under pressure from public clouds such as Microsoft Azure, Amazon Web Services and Google Cloud Platform.

Citrix vs. Microsoft Windows 365: The Challenge

Citrix now offers various services in public clouds. But now the company also faces new, potentially intense competition from Microsoft Windows 365.

The Microsoft approach allows channel partners and MSPs to focus on a DaaS software stack from a single software vendor that develops and controls the entire code base — from Windows software to the underlying cloud infrastructure. In theory, that means partners will find the Microsoft Windows 365 approach less complex than Citrix technology. Companies such as Nerdio are helping partners to accelerate Microsoft Windows 365 deployments.

Meanwhile, some Citrix investors are growing impatient. A case in point: Activist hedge fund Elliott Management has amassed a more than $1 billion stake in Citrix and “wants the software company to take action to boost its lagging stock price,” The Wall Street Journal reported on September 7, 2021.

Citrix Revenue Forecast, CEO Transition

Bob Calderoni, interim CEO, Citrix Systems

On the financial front, Citrix expects to report revenue at the midpoint to the high end of its previously announced guidance range of $765 million to $775 million for the third quarter ended September 30, 2021, the company said. Citrix will report full financial results for the third quarter on Thursday, November 4, 2021, before market open.

In a prepared statement about the CEO change, Calderoni thanked Henshall for his work and emphasized Citrix’s continued evolution toward a SaaS-based business model. Calderoni said in part:

“I am pleased to be taking on the role of interim CEO and excited to work with the Board, talented management team, and dedicated Citrix employees during such an important time for the Company. We remain focused on transitioning the business to SaaS as we work to securely deliver a unified work experience for our valued customers. I look forward to leading the Company into its next phase of growth and success, and I am confident that this will be a smooth leadership transition.”

Potential Citrix Buyers: Private Equity, Strategic Technology Businesses

So, who could potentially step up to acquire Citrix Systems? The obvious answer involves private equity companies — many of which are quite familiar with Citrix and its offspring. For instance, Francisco Partners and Evergreen Coast Capital now own LogMeIn — which had swallowed such Citrix brands as GoToConnect and GoToMeeting ahead of the September 2020 private equity deal.

Potential Citrix buyers could also include private equity firms Bain Capital and/or Thoma Bravo, though valuation is a hurdle, Bloomberg suggests.

Elsewhere, we wonder if enterprise technology provider Broadcom would acquire Citrix. After all, Broadcom has a habit of buying older software companies that are deeply entrenched in the enterprise and throw off a lot of cash. Examples include Broadcom buying Symantec’s enterprise security business for $10.7 billion in 2019, and CA Technologies for $18.9 billion in 2018.

 

 

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