Citrix Systems to Acquire Wrike in a USD 2.25 billion all cash deal

Citrix Systems today announced that it has entered into a definitive agreement to acquire Wrike. The latter is a rapidly growing, recognized leader in the SaaS collaborative work management space. The companies will close the deal for $2.25 billion in cash. The combination will bring together Citrix’s powerful digital work platform and Wrike’s innovative work management solution. The former securely delivers the resources an employee needs to be productive in one unified experience; the latter streamlines collaboration and work execution, providing employees with additional tools to work efficiently and securely wherever they may be.

Thus, the addition of Wrike’s cloud-delivered capabilities will 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. Further, the combined company will offer customers an enhanced value proposition through complementary solutions, unlocking new revenue opportunities both within existing installed customer bases and new lines of business buying centres, including marketing, professional services, and HR. Together, Citrix and Wrike will serve over 400,000 customers across 140 countries. Besides, upon closing, Wrike will gain access to Citrix’s robust ecosystem of partners, creating new opportunities within the ecosystem to drive additional value for customers.

Delivering the Future of Work

“Work today is happening everywhere – at home, in the office and on the road. We believe that in the future, success will go to those companies that can support flexible and hybrid work models; who can provide a consistent, secure and efficient experience that removes the complexity and noise from work so employees can focus and perform at their best, wherever they happen to be,” said David Henshall, president and CEO, Citrix. “Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience. This will enable teams to securely access the resources and tools they need to collaborate and also get work done most efficiently and effectively possible across any channel, device or location.”

Expanding the Digital Workspace

Citrix provides a market-leading digital work platform. It helps companies to deliver unified, secure and reliable access to the systems, information and tools people need to get work done wherever they may be working. With the addition of Wrike’s offerings, Citrix will expand its platform. It will further include new, collaborative work management capabilities to simplify work execution and boost employee effectiveness. It will also improve productivity by automating and streamlining team collaboration and unifying workflows.

“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, further, use these to exceed goals and keep business moving forward,” said Andrew Filev, founder and CEO, Wrike.

Financial Details

Wrike ended 2020 with more than $140 million in unaudited SaaS ARR. This reflects more than 30% CAGR in SaaS ARR over the prior two years. The company is expected to have approximately 30 per cent stand-alone growth to between $180-190 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.

Citrix expects to fund the transaction with a combination of new debt and existing cash and investments. The transaction has been unanimously approved by the board of directors of both Citrix and Wrike. It is expected to close in the first half of 2021, subject to regulatory approvals and other customary closing conditions. Until close, companies will continue to operate independently. Upon closing, Filev will continue to lead the Wrike team. Further, he will report to Arlen Shenkman, EVP and Chief Financial Officer, Citrix.

J.P. Morgan Securities LLC is serving as financial advisor to Citrix on the transaction and Shearman & Sterling LLP as legal counsel. The financial advisor to Wrike is Goldman Sachs Group & Co. LLC and legal counsel is Kirkland & Ellis LLP.