Citrix-Tibco Merger Date Disclosed; Layoffs Expected -

The Citrix Systems sale to Vista Equity Partners and Elliott Investment Management, is expected to close on September 30, an SEC filing revealed.

The resulting Citrix Systems-Tibco Software merger will include roughly 1,000 employees, Bloomberg reported in early September 2022. Citrix has 10,316 employees listed on LinkedIn, while Tibco has 4,794 employees listed as of September 11, 2022.

The combined Citrix-Tibco software company will serve 400,000 customers, including 98 percent of the Fortune 500, with 100 million users in 100 countries, the buyers said earlier this year.

The $16.5 billion Citrix buyout, announced in January 2022, overcame a $15 billion debt financing challenge.

Citrix Layoffs, Wrike Asset Sale?

Part of the financial model may include Citrix selling off Wrike, a protect management software startup that Citrix acquired from Vista for $2.25 billion in 2021, Bloomberg reported.

On the cost-cutting front, Bloomberg said:

Citrix and Tibco plan to can cut costs by $371 million annually;
that includes one-time costs of around $200 million and 955 layoffs -- including sales and marketing cuts of about 450 jobs.

Ahead of the deal, Citrix pivoting toward cloud subscription services — with mixed results. Indeed, Q4 of 2021 financial results included:

Revenue of $851 million, up 5 percent from Q4 of 2020.
Net income of $103 million, down from $112 million in Q4 of 2020.

Citrix Business Challenges: DaaS, VDI and Nerdio Competition

Citrix buyout rumors had swirled since September 2021, and they grew louder after a CEO change in October 2021 and Citrix layoffs in November 2021.

Among the challenges facing 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.

More recently, Citrix has faced pressure from Microsoft Windows 365, ChannelE2E believes. Indeed, thousands of MSPs have been flocking toward Microsoft’s home-grown DaaS software stack. In many cases, those MSPs are working with Nerdio to navigate Microsoft Windows 365 business opportunities.

Private Equity and Debt Financing: Recent Hurdles

Meanwhile, the Citrix debt sale associated with the company buyout required more work than originally expected because of rising interest rates and falling software company valuations.

Read between the lines and there’s an important lesson here for MSPs, MSSPs, technology and cybersecurity companies. Indeed, private equity firms may appear to have endless piles of cash ready for more acquisitions. But the reality is quite different in many deals — where PE firms and bankers are working overtime to adjust their financial plans and debt financing for buyouts.

After some early hurdles, banks seeking to sell some of the debt backing the Citrix deal have received more demand than they can fill, raising the prospect they may suffer a smaller loss than expected, Reuters reported.