Citrix Systems said that it is acquiring SaaS collaborative work management company Wrike for $2.25 billion in cash.
The deal is likely to accelerate Citrix’s business model transition to the cloud and strategy to become a complete SaaS-based work platform addressing the needs of various functional groups within the enterprise.
Headquartered in San Jose, California, and employing more than 1,000 employees, Wrike, a Vista Equity Partners portfolio company, provides approximately 18,000 customers globally with SaaS-based work platform.
Wrike is expected to have approximately 30 percent stand-alone growth to between $180 million and $190 million in unaudited SaaS annualized recurring revenue (ARR1) in 2021, with the opportunity to accelerate growth over time under Citrix’s ownership.
The company said that the combined entity will offer customers an enhanced value proposition through complementary solutions. Citrix and Wrike will serve over 400,000 customers across 140 countries. In addition, upon closing, Wrike will gain access to Citrix’s ecosystem of partners.
David Henshall, President and CEO, Citrix said: “Together, Citrix and Wrike will deliver the solutions needed to power a cloud- delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location.”
“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 empower every person, team, and organization to achieve their very best. Together, we will unlock the workspace of the future, truly transforming the work experience and equipping people with an innovative set of solutions they can use to exceed goals and keep business moving forward,” said Andrew Filev, Founder and CEO, Wrike.
Wrike ended calendar year 2020 with more than $140 million in unaudited SaaS ARR, reflecting more than 30 percent CAGR in SaaS ARR over the prior two years. The company is expected to have approximately 30 percent stand-alone growth to between $180 million and $190 million in SaaS ARR1 in 2021, with the opportunity to accelerate growth over time under Citrix’s ownership. The addition of Wrike is highly complementary to Citrix’s existing customer base and is expected to accelerate Citrix’s SaaS ARR growth.
Financing and purchase accounting impacts to deferred revenue will affect 2021 non-GAAP earnings per share. Integration and other costs related to the acquisition are expected to be modestly dilutive to non- GAAP earnings per share in 2021. The transaction is expected to be neutral to Citrix’s fiscal year 2022 non-GAAP earnings per share and free cash flow, and accretive thereafter, said the company.
Citrix expects to fund the transaction with a combination of new debt and existing cash and investments. Citrix said it is committed to its investment grade credit ratings and plans to return to leverage levels within 24 months. Citrix said it has obtained a commitment from JPMorgan Chase Bank, N.A. for a $1.45 billion senior unsecured 364-day bridge loan facility.