Citrix is in use by many health systems so this is going to be one to keep an eye on. Will this lead to more investment in what is considered a "Long in the tooth" technology platform or will PE try to squeeze every ounce of value out of the company before selling it off. You should be able to tell based on the moves over the next six months.
My So What? Well, you'll have to listen.
Today in health, it Citrix is sold to private equity. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week. And I'll call it. Instead of channels dedicated to keeping health it staff current and engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders, Gordian dynamics, Quill health tau site nuance, Canon medical, and current health. Check them out at this week. health.com/today.
If you hadn't heard my interview with Lee Milligan going over to this week health conference and check it out. He is a great storyteller and a fantastic guest. Just wanted to make you aware of that. All right. Today's story Citrix to be acquired by Vista and evergreen Elliot in a $16.5 billion. All cash deal will be merged with TIBCO and create a SAS powerhouse.
At least that's what the press release says. Let me give you some excerpts from this story. I'm getting this from tech crunch. Citrix I love this Citrix the longer the tooth virtualization giant that had been making a slow transition into cloud computing is being acquired by PE firm Vista equity partners and evergreen capital, which I just said 16.5 billion Vista plans to combine it with Tipco. Which it acquired in 2014 for $4.3 billion, the all cash deal will include the assumption of Citrix is debt.
The company says the deal comes after a long period of speculation over the company. Citrix has been looking at strategic options for at least. The last five months,
which culminated in last month with reports that Vista and Elliot speculation being that they would acquire the company for 13 billion. Citrix has recently traded on the NASDAQ, gives you the details 104.9. , 24% premium over what it was here's another key moment. PE firms similar to VCs are sitting on massive funds at the moment. That they need to invest one obvious move to address that is to scoop up large technology businesses. That are need of restructuring and consolidation. Bringing Citrix together with Tipco could see analytics from the ladder cross sold with virtualization and cloud computing services from the former at a time when many buyers that is enterprises are looking for more simplified supplier partnerships
and better financial around it services. For increasingly remote workforces in the wake of COVID 19 pandemic. It also gives the combined company a hefty business from day one. It will have 400,000 customers, including 98%. Of the fortune 500 Citrix said. In total with a hundred million users in a hundred countries.
Another key quote here, Vista and Citrix have been something of a revolving door prior to the deal. The company paid 2.25 billion to acquire project management platform Reich from the PE firm a year ago. Tipco has also been the subject of sell-off speculation itself. Although it seems that Vista decided to take another route, combining it with Citrix could be more interesting.
Use of the assets that speaks to how enterprises are evaluating and buying it. It goes on. It has. Double quotes here has a quote from the. CEO of Citrix has a quote from the CEO of Tipco. And as you would imagine, they say wonderful things about this partnership and cross selling and the value to customers.
So. Let's see, where am I going to go with this? Here's my, so what on this, there's a couple of key quotes in this article.
I think the first is the first line in this article, Citrix, the long in the tooth virtualization, giant Citrix. Has not been investing the way they should in their technology platform. They have not been innovating on that platform. It was the platform. At a certain time in history and they have written that as far as they could possibly write it, they needed to sell, they needed to invest in this platform. They need to move it forward.
, the biggest value in this again is the fact that they are in 98% of the fortune 500 clients and a hundred million users in a hundred countries. 400,000 customers. That's the biggest value in this? I mean, you take the TIBCO solution to that. , client base, that's easier said than done. We haven't seen that done really well yet, but we'll see. Maybe, it could, but this cross selling thing is a common theme that we're seeing. We're seeing it in the.
Cerner and Oracle deal and you'll see it over and over again. I think the other thing to keep in mind is that PE firms similar to VCs are sitting on massive funds at the moment. There's so much money in the system. Don't be surprised to see more of these types of deals, companies that you used to think, oh, they're too big to be bought.
Are very much in play. There is massive amounts of money out there.
And the PE firms specifically are looking to bring together firms that have synergies. That will lead to greater growth amongst the various firms. And that's what you're seeing here. , finally, what do I think this means for Citrix?
A lot of healthcare companies use Citrix as the foundation for the virtualization of the EHR. And I think this paragraph gives me pause and that is sit Vista and Citrix have been something of a revolving door. Prior to the steel, the company paid 2.25 billion to acquire project management from Reich.
From the PE firm a year ago, Tipco has also been the subject of speculation of sell-off. Although it seems a Vista decide to take another route. This is a money play. It's clearly a money play. It's one of the problems that you have when a private equity firm comes in and takes over is that they will try to squeeze every nickel and dime out of the deal. And it doesn't necessarily the, to more investment that you might think.
Citrix needs investment in this platform. It is, as we said earlier, a little long in the tooth, it works today. But as we know this world is changing very rapidly. The security landscape is changing rapidly. The performance landscape is changing rapidly. The dynamics of how we access this information is changing rapidly.
And if Citrix isn't able to keep up. Then we are going to have some problems in the longterm. And so that's something I would keep an eye on. What, what do you see as . This private equity. , acquisition takes hold. Are you seeing more investment in the technology or are you just seeing them use it to bring Tipco into your healthcare environment and say, Hey, here's another thing we're selling because if they're not going to be investing longterm, it may be time to start evaluating a different.
Virtualization platform that is going to take you into the next 10 years. All right. That's all for today. If you know someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week, health.com or wherever you listen to podcasts, apple, Google, overcast, Spotify, Stitcher.
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