LogMeIn will pay Citrix $1.8 billion in stock, and shareholders of the companies will each hold 50% of the post-merger company.
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LogMeIn has effectively taken over Citrix’s unwanted GoTo business.
Citrix Systems Inc. is merging its GoTo business with LogMeIn Inc.in a $1.8 billion deal that combines the rival online meeting organizers. Mizuho Securities analyst Abhey Lamba wrote in a report that the amount of LogMeIn stock comes to about $12 per share for Citrix investors.
The merged GoTo-LogMeIn will have more than two million customers in virtually each country, we’re told, and the Reverse Morris Trust deal has been approved by Citrix’s and LogMeIn’s board of directors.
Fort Lauderdale, Fla.-based Citrix had already said it would spin off the business, known as GoTo, in a tax- free deal in the second half of the year.
The company added Elliott’s Jesse Cohn to its board in July, and said the board would perform a “comprehensive operational review” and had “initiated a review of strategic alternatives for the GoTo family of products”. LogMeIn helps employees log into their company’s computers systems from outside the office; it went public in 2009. LogMeIn CEO Bill Wagner will run the combined operation, which is expected to bank annual revenues of $1bn or more. Citrix will also contribute $25 million in cash to the new company, which will have revenue of about $1 billion. This sort of transaction is called a “Reverse Morris Trust”. Hewlett-Packard Enterprise Co HPE.N announced one in May CSC.N , with its call center and services unit merged with Computer Sciences Corp CSC.N to create a $9 billion company.
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RBC Capital Markets RY.TO advised LogMeIn, and Qatalyst Partners and Goldman Sachs GS.N advised Citrix.
