Combined Entity will be a Leading SaaS Company
with a Diverse and Innovative Product Portfolio
LogMeIn, Inc. (NASDAQ:LOGM) and Citrix Systems, Inc. (NASDAQ:CTXS)
today announced that the companies have entered into a definitive
merger agreement for LogMeIn to combine with Citrix’s GoTo business
in a Reverse Morris Trust transaction. The transaction is
valued at approximately $1.8 billion based on shares to be issued
and LogMeIn’s closing price of $65.31 as of July 25, 2016.
The transaction, which has been unanimously approved by the
Boards of Directors of Citrix and LogMeIn, is expected to be
tax-free to Citrix and its shareholders for U.S. federal income tax
purposes. The combined company is expected to have annual revenues
in excess of $1 billion with more than two million customers in
virtually every country around the globe. Upon completion of the
transaction, the combined company is expected to achieve run rate
cost synergies for the benefit of both Citrix and LogMeIn
shareholders of $65 million within the first year post-close, and
run rate cost synergies of more than $100 million in year two.
The combination brings together proven innovators with a shared
belief in simplifying the way people connect to customers,
colleagues and the world around them. The GoTo family of products
delivers collaborative communication solutions for small and medium
sized businesses and has strong global brand recognition through
leading products including GoToAssist, GoToMeeting, GoToMyPC,
GoToTraining, GoToWebinar, Grasshopper and OpenVoice.
LogMeIn, a leading provider of cloud-based connectivity, has
rapidly attracted millions of users and thousands of leading
businesses to its popular and disruptive products, including
join.me, LastPass, LogMeIn Rescue and BoldChat, among others.
Bill Wagner, President and CEO of LogMeIn, who will lead the
combined company as President and CEO, commented, “We are extremely
excited about this transformative merger and the profound benefits
it will bring to our customers, our people and our
shareholders. Both companies have passionate employees who
are committed to developing easy-to-use software that simplifies
the way we connect with people, devices, apps and products.
The additional scale of the combined company will allow us to
accelerate innovation in order to deliver better outcomes for our
customers and also creates a compelling financial model that will
reward our shareholders.”
Kirill Tatarinov, President and Chief Executive Officer of
Citrix, said, “We believe this combination is a winning outcome for
all parties. Both LogMeIn and GoTo have a shared goal of developing
innovative solutions to exceed customer expectations by simplifying
business and personal communications. Given that we have already
been working towards a spinoff of GoTo, we expect this to be a
smooth transition for the business. From Citrix’s perspective, this
transaction will allow us to further enhance our strategic focus,
operational efficiency and accelerate execution of our strategy to
provide the world’s best integrated technology services for secure
delivery of apps and data.”
“We have great respect for Bill, the LogMeIn team and the
company’s commitment to building great products that simplify how
people connect,” said Bob Calderoni, Executive Chairman of Citrix.
“When we announced plans to spin off our GoTo family of products
last November, we emphasized the value creation opportunity for our
shareholders. We believe this combination will accelerate that
opportunity, further enhancing value for Citrix shareholders
through the ownership of shares in the combined company. I also
want to thank Chris Hylen, whose leadership as SVP and GM of the
GoTo business, along with the tireless work of his team, has
positioned GoTo for continued growth and success following its
separation from Citrix.”
Strategic Rationale
- A Leading SaaS Company With A Diverse Product
Portfolio – Assets from both companies fill gaps in the
respective product lines, resulting in better experiences and
outcomes for our customers. In addition, the scale and
stability of the combined company enables accelerated growth of the
businesses in emerging verticals, which include cloud-based
telephony and identity, as well as IoT.
- A Shared Focus On Innovation That Is Enhanced by
Scale – The merger brings together the combined resources
of each company to address the challenges customers face in the
wake of compelling secular trends, including workforce mobility,
rapid adoption of cloud-based applications and the proliferation of
connected products.
- Talented Team Positioned To Capture Exciting Growth
Opportunities – Through a commitment to retaining the best
talent from both companies, the new company will have a seasoned
management team with a track record of driving growth, innovation,
and shareholder value. The combined company’s Board will be
comprised of experienced directors from both LogMeIn and Citrix who
share a commitment to customer satisfaction and shareholder value
creation.
- Powerful Financial Profile That Drives Long-Term
Shareholder Value – Shareholders are expected to benefit
from the significant free cash flow generated as a result of
synergy capture, and the scale of the combined company would enable
us to take advantage of operational efficiencies over the longer
term to continuously improve the company’s financial profile.
Financial Benefits of the Transaction
LogMeIn expects the combined company to have a strong financial
profile, including:
- Pro Forma revenue of more than $1 billion
- Pro Forma Adjusted EBITDA margins of approximately 35%, after
realizing year one run rate cost synergies of $65 million
- Pro Forma Free cash flow of more than $250 million (after year
one run rate cost synergies)
- Anticipated Pro Forma 35%+ Free Cash Flow Accretion over
Standalone LogMeIn (after year one run rate cost synergies)
The combined company is expected to achieve run rate cost
synergies of more than $100 million within two years
post-close.
Management, Governance and Headquarters
LogMeIn’s Bill Wagner will continue in his role as President and
CEO, and LogMeIn’s Ed Herdiech will serve as Chief Financial
Officer. Certain members of the GoTo management team are expected
to join the combined company as well. The combined company will be
headquartered in Boston.
Upon closing, the combined company’s Board of Directors will
consist of nine directors: five current LogMeIn directors and four
Citrix director appointees. Citrix’s four director appointees have
proven expertise in driving operational efficiency and will include
current Citrix directors Bob Calderoni, Jesse Cohn, and Peter
Sacripanti, as well as Citrix’s Chief Operating Officer and Chief
Financial Officer, David Henshall. Michael Simon, former CEO and
current Chairman of the Board of LogMeIn, will remain in place as
Chairman of the combined company’s Board. Bill Wagner will
also retain his Board seat. LogMeIn’s other three directors
will be named at a later date.
The Board will form an Operating Committee upon the close of the
transaction, which will consist of two LogMeIn directors and two
Citrix directors, all of whom will be named at a later date, to
oversee the realization of the full value of the identified
synergies. Management and the Operating Committee intend to retain
the services of a globally recognized consulting firm to advise on
the capture of synergies.
Transaction Details
The combination of LogMeIn and Citrix’s GoTo family of products
will be effected through a Reverse Morris Trust (RMT) transaction,
pursuant to which Citrix has created a wholly owned subsidiary, or
GetGo, to hold the GoTo business. Citrix will distribute that
subsidiary to Citrix shareholders in either a spin-off or split-off
transaction. Immediately thereafter, the GetGo subsidiary will be
merged with a wholly owned subsidiary of LogMeIn, with GetGo
surviving the merger and remaining as a wholly owned subsidiary of
LogMeIn. The combination will result in Citrix equityholders
receiving an aggregate of approximately 27.6 million LogMeIn shares
on a fully diluted basis. Under the RMT structure, the transaction
is expected to be tax-free to Citrix and its shareholders for U.S.
federal income tax purposes. Immediately following the transaction,
Citrix shareholders will own approximately 50.1% of all outstanding
shares of the combined company on a fully diluted basis, while
existing LogMeIn shareholders will own approximately 49.9% of the
combined company on a fully diluted basis.
The issuance of shares by LogMeIn in connection with the
transaction requires approval by LogMeIn shareholders, and the
transaction is subject to certain regulatory approvals and other
customary closing conditions, including receipt of opinions of
counsel with respect to the tax-free nature of the proposed
transaction. In connection with the definitive agreement,
Michael Simon, LogMeIn’s Chairman of the Board, who currently owns
more than 3% of LogMeIn’s shares, has agreed to vote in favor of
the transaction. The transaction is expected to close during the
first quarter of 2017.
In connection with approving the transaction, on July 26, 2016,
LogMeIn’s Board of Directors also declared a special cash dividend
of $0.50 per share of common stock. The special dividend will
be paid on August 26, 2016 to shareholders of record on August 8,
2016. LogMeIn currently has approximately 25.3 million shares
of common stock outstanding. As contemplated by the
definitive agreement, the Company announced that it currently
expects to declare an additional dividend of $0.50 per share of
common stock prior to the consummation of the transaction and a
final dividend of $0.50 per share of common stock subject to the
consummation of the transaction, on or about the date of such
consummation.
Advisors
RBC Capital Markets is serving as financial advisor and Latham
& Watkins LLP is serving as legal counsel to LogMeIn. Qatalyst
Partners and Goldman, Sachs & Co. are serving as financial
advisors to Citrix, and Goodwin Procter LLP and Skadden, Arps,
Slate, Meagher & Flom LLP are serving as legal counsel.
Conference Call Details
The two companies will host a joint conference call today at
4:30 p.m. E.T. to discuss this transaction. The call will include a
slide presentation and participants are encouraged to view the
presentation via webcast at
https://investor.logmeininc.com/about-us/investors/overview/default.aspx
The conference call may also be accessed by dialing: (877)
407-9124 (Toll Free) or (201) 689-8584 (International). A replay
will be available for approximately 7 days, and can be accessed by
dialing: (877) 481-4010 (Toll Free) or (919) 882-2331
(International) and using the ID 10063.
In separate news releases, Citrix and LogMeIn both announced
their financial results for the second quarter of 2016, ended June
30, 2016. Immediately following the discussion of the transaction,
at 5:15 p.m. E.T., Citrix will discuss its financial results for
the second quarter of 2016. LogMeIn will address any questions on
earnings on the joint transaction call at 4:30 p.m. E.T. and has
cancelled its previously scheduled earnings call set for July 28,
2016.
About LogMeIn
LogMeIn, Inc. (Nasdaq:LOGM) simplifies how people connect
to each other and the world around them. With millions of users
worldwide, our cloud-based solutions make it possible for people
and companies to connect and engage with their workplace,
colleagues, customers and products anywhere,
anytime. LogMeIn is headquartered
in Boston with offices in Bangalore,
Budapest, Dublin, London, San
Francisco and Sydney.
About Citrix
Citrix (NASDAQ:CTXS) aims to power a world where
people, organizations and things are securely connected and
accessible to make the extraordinary possible. Its technology
makes the world’s apps and data secure and easy to access,
empowering people to work anywhere and at any time. Citrix provides
a complete and integrated portfolio of Workspace-as-a-Service,
application delivery, virtualization, mobility, network delivery
and file sharing solutions that enables IT to ensure critical
systems are securely available to users via the cloud or on-premise
and across any device or platform. With annual revenue in 2015 of
$3.28 billion, Citrix solutions are in use by more than 400,000
organizations and over 100 million users globally. Learn more
at www.citrix.com.
Forward-Looking Statements
This communication contains “forward-looking statements”
concerning LogMeIn, Inc. (“LMI”), Citrix Systems, Inc. (“Citrix”),
GetGo, Inc. (“GetGo”), the proposed transactions and other matters.
All statements other than statements of historical fact contained
in this report are forward-looking statements within the meaning of
Section 27A of the United States Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the United States
Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Forward-looking statements usually relate to future
events and anticipated revenues, earnings, cash flows or other
aspects of our operations or operating
results. Forward-looking statements are often identified by
the words “believe,” “expect,” “anticipate,” “plan,” “intend,”
“foresee,” “should,” “would,” “could,” “may,” “estimate,” “outlook”
and similar expressions, including the negative thereof. The
absence of these words, however, does not mean that the statements
are not forward-looking. These forward-looking statements are
based on the current expectations, beliefs and assumptions of the
management of LMI, Citrix and GetGo concerning future developments,
business conditions, anticipated synergies, pro forma financial
results, the Company’s plans to issue dividends in connection with
the transaction, and their potential effects. There can be no
assurance that future developments affecting the parties will be
those that the parties anticipate.
Among the risks and uncertainties that could cause actual
results to differ from those described in the forward-looking
statements are the following: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement, (2) the risk that LMI’s
stockholders may not approve the issuance of the Company common
stock in connection with the proposed merger, (3) the risk that the
necessary regulatory approvals may not be obtained or may be
obtained subject to conditions that are not anticipated, (4) risks
that any of the closing conditions to the proposed merger,
including Citrix’s distribution of the shares of GetGo, may not be
satisfied in a timely manner, (5) risks related to disruption of
management time from ongoing business operations due to the
proposed transactions, (6) failure to realize the estimated
synergies or growth from the proposed transactions or that such
benefits may take longer to realize than expected, (7) risks
related to unanticipated costs of integration of GetGo by LMI, (8)
the effect of the announcement of the proposed transactions or the
consummation of the proposed transactions on the ability of LMI and
Citrix to retain and hire key personnel and maintain relationships
with their key business partners and customers, and on their
operating results and businesses generally, (9) the length of time
necessary to consummate the proposed transactions, (10) adverse
trends in economic conditions generally or in the industries in
which the LMI and Citrix operate, (11) adverse changes to, or
interruptions in, relationships with third parties unrelated to the
announcement, (12) LMI’s ability to compete effectively and
successfully and to add new products and services, (13) LMI’s
ability to successfully manage and integrate acquisitions, (14) the
ability to attract new customers and retain existing customers in
the manner anticipated, (15) unanticipated changes relating
to competitive factors in the parties’ industries, and (16) the
business interruptions in connection with the LMI’s technology
systems. Discussions of additional risks and uncertainties
are contained in LMI’s and Citrix’s filings with the U.S.
Securities and Exchange Commission (the “SEC”). None of LMI, Citrix
or GetGo is under any obligation, and each expressly disclaim any
obligation, to update, alter, or otherwise revise any
forward-looking statements, whether written or oral, that may be
made from time to time, whether as a result of new information,
future events, or otherwise. Persons reading this
announcement are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date
hereof.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall
be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended. Subject to
certain exceptions to be approved by the relevant regulators or
certain facts to be ascertained, the public offer will not be made
directly or indirectly, in or into any jurisdiction where to do so
would constitute a violation of the laws of such jurisdiction, or
by use of the mails or by any means or instrumentality (including
without limitation, facsimile transmission, telephone and the
internet) of interstate or foreign commerce, or any facility of a
national securities exchange, of any such jurisdiction.
Important Additional Information Will be Filed with the SEC
In connection with the proposed transaction, LogMeIn and GetGo
intend to file registration statements with the SEC. LogMeIn will
also file a proxy statement. Citrix stockholders are urged to read
the prospectus and/or information statement that will be included
in the registration statements and any other relevant documents
when they become available, and LogMeIn stockholders are urged to
read the proxy statement and any other relevant documents when they
become available, because they will contain important information
about LogMeIn, GetGo, Citrix and the proposed transactions. The
proxy statement, prospectus and/or information statement and other
documents relating to the proposed transactions (when they become
available) can also be obtained free of charge from the SEC’s
website at www.sec.gov. The proxy statement, prospectus and/or
information statement and other documents (when they are available)
can also be obtained free of charge from Citrix upon written
request to Investor Relations, 851 Cypress Creek Road, Fort
Lauderdale, FL 33309, or by calling (954) 229-5758 or upon written
request to LogMeIn, Investor Relations, 320 Summer Street, Boston,
MA 02210 or by calling (781) 897-0694.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any
security holder of LogMeIn. However, LogMeIn, Citrix and certain of
their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from shareholders of
LogMeIn in connection with the proposed transaction under the rules
of the SEC. Information regarding the persons who are, under the
rules of the SEC, participants in the solicitation of the
stockholders of LogMeIn in connection with the proposed
transactions, including a description of their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the proxy statement/prospectus when it is filed with the SEC.
Information about the directors and executive officers of Citrix
may be found in its Annual Report on Form 10-K filed with the SEC
on February 18, 2016, and its definitive proxy statement relating
to its 2016 Annual Meeting of Shareholders filed with the SEC on
April 29, 2016. Information about the directors and executive
officers of LogMeIn may be found in its Annual Report on Form 10-K
filed with the SEC on February 19, 2016, and its definitive proxy
statement relating to its 2016 Annual Meeting of Stockholders filed
with the SEC on April 8, 2016.
Contacts
LogMeIn Contacts:
Investors
Rob Bradley
781-897-1301
rbradley@LogMeIn.com
Press
Craig VerColen
781-897-0696
Press@LogMeIn.com
Citrix Contacts:
Investors
Eduardo Fleites
954-229-5758
eduardo.fleites@citrix.com
Press
Eric Armstrong
954-267-2977
eric.armstrong@citrix.com
Citrix Systems (NASDAQ:CTXS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Citrix Systems (NASDAQ:CTXS)
Historical Stock Chart
From Apr 2023 to Apr 2024