Buying and selling companies can be complicated affairs, with all kinds of pressure coming from all sorts of directions. According to Reuters (via ZDNet), Citrix, maker of communications software and networking solutions and a Microsoft competitor in the cloud computing space, is in just such a situation.
Essentially, for a number of reasons including pressure from the hedge fund activist investor Elliot Management, Citrix is looking to sell the company outright and is actively seeking suitors. In the past, according to a tweet by Mary Jo Foley of ZDNet, Microsoft was considered a possibility, but now it seems that Citrix has targeted Dell as a potential buyer. Selling off assets, including its GoTo product line, would be an option should a complete buyout fail to materialize.
According to ZDNet, Citrix revenues in 2015 could exceed $3.2 billion, and its market cap is over $11 billion. This valuation would make it a difficult acquisition for a company like Microsoft that already has competing product lines. Dell, however, would be an attractive buyer for a number of reasons:
– Citrix brings Dell software as a service revenue via GoTo as well as other services
– Mobile device management software such as XenMobile would give Dell an edge in mobility
– Citrix’s desktop virtualization tools would work with Dell’s Wyse unit
– NetScalar, Citrix’s networking line, would bolster Dell’s fledgling networking business
– Dell could also bundle multiple Citrix products with its hardware
We’ll have to keep our eye on developments as this story unfolds. Dell has been making serious improvements to its products and business processes since going private in 2013, and a Citrix acquisition could give the hardware manufacturer a significant boost in more than one of its businesses. While buying Citrix would make Dell an indirect competitor to Microsoft, that’s certainly not an unusual situation in the technology industry and likely would have minimal impact on its status as an important Microsoft OEM.
Further reading: Acquisitions, Citrix, Cloud Computing, Dell
