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Remote Control Merger: LogMeIn, Citrix GoTo Brands Combine

LogMeIn and Citrix Systems‘ GoTo business are merging in a $1.8 billion deal that combines two of the leading remote access software providers, the companies announced today. The combined businesses will have roughly $1 billion in annual revenues while serving two million customers worldwide, the companies said.

bill-wagner

Bill Wagner

The GoTo brands include GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice.  LogMeIn’s brands include join.me, LastPass, LogMeIn Rescue and BoldChat, among others. Bill Wagner, president and CEO of LogMeIn, will lead the combined company.

For LogMeIn, the deal essentially allows the company to double-down on remote access, collaboration, management and IoT applications. For Citrix, the deal allows the virtualization and network software company to shed yet another non-core asset. “Given that we have already been working towards a spinoff of GoTo, we expect this to be a smooth transition for the business,” said Citrix CEO Kirill Tatarinov.

Citrix announced the potential GoTo spin-off in November 2015. On a somewhat related note, Citrix sold its two cloud infrastructure management products (CloudPlatform and CloudPortal Business Manager) in early 2016.

LogMeIn, GoTo Merger: Revenue Synergies

LogMeIn expects the combined company to generate:

  • Pro forma revenue of more than $1 billion;
  • pro forma adjusted EBITDA margins of approximately 35%, after realizing year one run rate cost synergies of $65 million; and
  • Pro forma free cash flow of more than $250 million (after year one run rate cost synergies).

LogMeIn’s Bill Wagner will continue as president and CEO, and LogMeIn’s Ed Herdiech will serve as CFO. Certain members of the GoTo management team are expected to join the combined company as well, though specific names were not disclosed as part of the announcement.

The LogMeIn and GoTo brands have had made various moves to work with channel partners over the years. Under former CEO Michael Simon, LogMeIn in 2013 directly embraced MSPs. In some ways, I believe the company eventually downplayed the effort after discovering the high costs associated with on-boarding and training the service providers.

Meanwhile, Citrix in 2010 acquired Paglo — an emerging RMM (remote monitoring and management) platform for MSPs at the time. Citrix rebranded Paglo as GoToManage in late 2010 but it never really caught on. Instead, major RMM platform providers like ConnectWise LabTech, Continuum, Kaseya and SolarWinds MSP (featuring LogicNow and N-able) became far better known players in the MSP sector.

Potential Winner: Continuum MSPs

Still, there have been some key LogMeIn channel successes — including a 2013 partnership with Continuum, a relationship that continues to deliver upside for Continuum’s MSP partners.

Michael George

Michael George

The LogMeIn-GoTo deal “is a good thing for our relationship,” Continuum CEO Michael George told ChannelE2E. “As our exclusive partner, LogMeIn is a clear winner in the market and it’s the one with whom we have a very long-term exclusive contract. We have a great history and working relationship. This will give us — and therefore our partners —  the broadest set of tools in the market.”

No doubt, remote control software rivals will watch the LogMeIn-GoTo deal closely. Several RMM providers now offer their own remote control software (namely ConnectWise ScreenConnect and SolarWinds N-able MSP Anywhere) that compete with LogMeIn.

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