Is it swollen? Citrix will be delisted from nasdaq

$16.5 billion, the biggest leveraged buyout in recent months.

Citrix, a software company that allows employees to work securely and remotely from any of its devices, will now be delisted from NASDAQ and sold to Vista Equity and Elliott Management.

A private equity firm that invested in software acquisitions intends to merge Vista with Tibco Software, another company in its portfolio focused on data analytics and integrated business management.

Meanwhile, Elliott, a radical investment manager who currently holds a 12 percent stake, has been seeking changes to the company since 2015. The company's Jesse Cohn joined Citrix's board between 2015 and 2020, urging it to break up the division and buy back shares. (Citrix therefore spun off its GoTo services business and sold it to LogMeIn in 2017.)

For Vista and Elliott, their deal makes sense, and as the first acquisition this year worth more than $10 billion, they're making big bets on future consolidations.

However, Citrix's deal seems more difficult to understand. After all, for the past two years, companies around the world have seized the good times in the field of working from home. Instead, the company has been thinking about its future for the past five months.

Why, then, did Citrix—which was, after all, a very early enterprise-class proponent of virtualization and thin client devices—struggle so much that it became an acquisition target?

While Citrix did well in 2020 with a profit of $504 million, that number dropped to $307 million in 2021. Its stock plunged 23 percent in 2021 as it felt it wasn't fully taking advantage of work from home during the pandemic.

What went wrong? Does this acquisition show that these issues will be resolved?

Roy Irisley, principal analyst at Omdia, said: "Citrix lost its way when Mark Templeton left.

Templeton, who became president in 1998 and then CEO in 2001, "had the foresight to compete with VMware at Citrix," Illsley explains.

But he left in 2015, and the company lost focus, "with a range of technologies and no real strategy," he said.

This lack of strategic vision was combined with a subsequent short-term CEO, Moscow-born Microsoft alumnus Kirill Tatarinov, who spent 18 months in the office, during which time he struggled to meet sales targets.

Perhaps more troubling than CEO rotation and lack of strategic direction, Citrix is more troubling in its transition to cloud computing and subscription business models.

The merger with Tibco is clearly intended to help Citrix finally play its role as subscription software.

What's more, the sale now offers an "opportunity to refocus and create new strategies," Illsley said.

Adam Holtby, an analyst at Omdia, said: "At the same time, the company is in the field "has been dominated by Microsoft and VMware in recent years, so Citrix still has some work to do in terms of expanding market share."

But this market, a unified endpoint management tool that centralizes the management and security of all PCs, smartphones, laptops, desktops, and even VR headsets under one platform and one set of policies, is "gaining a lot of interest and attention," Holtby said.

Bob Calderoni, Citrix's interim CEO, talked about the possibility of cross-selling to take advantage of this growth space. From day one, he said, the combined company's 400,000 customers will include 98 percent of the Fortune 500.

But even as the space grows, there are critics who are skeptical that Tibco and Citrix will become a software-as-a-service powerhouse.

Analyst Hyoun Park said "Tibco" still needs more momentum in the areas of data science, automation and decision intelligence to become a top analytics player, and Citrix has not helped in this regard."

At the same time, Citrix needs to have more depth in "security, surveillance and call centers" that Tibco doesn't have, making the merger "a race without results," he said.