by Joe Panettieri • Sep 11, 2022
Citrix Systems and Tibco Software plan to lay off roughly 1,000 employees once the software companies merge in late September, Bloomberg reported.
Citrix has 10,316 employees listed on LinkedIn, while Tibco has 4,794 employees listed as of September 11, 2022.
The merger, overseen by private equity firms Vista Equity Partners and Elliott Investment Management, will take Citrix private and merge the business with Tibco. The combined 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, apparently has overcome a $15 billion debt financing challenge, and the Citrix-Tibco merger now appears on track to close in late September 2022, according to an SEC filing.
Related: See all technology industry layoffs listed here.
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:
Ahead of the deal, Citrix pivoting toward cloud subscription services — with mixed results. Indeed, Q4 of 2021 financial results included:
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.
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.
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