Market Overview

A Citrix Tale Of Spinoffs And Share Prices, Mergers And Market Moves

Share:
A Citrix Tale Of Spinoffs And Share Prices, Mergers And Market Moves

Citrix Systems, Inc. (NASDAQ: CTXS) shares are down over 22 percent on Wednesday, as it announced the completion of the spinoff of its GoTo family of service offerings and its subsequent merger with LogMeIn Inc (NASDAQ: LOGM) in a merger of online meeting organizers.

The Deal

The transaction, according to the company's release, would leave Citrix shareholders with 0.1718 shares of LogMeIn common stock for each share of Citrix they held as of January 20, 2017. The fractional shares will be compensated with cash.

The spinoff was announced in November 2015. At that time, Citrix said the company formed out of the spinoff will be made up of GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice.

Subsequently in July 2016, LogMeIn and Citrix Systems announced a merger agreement, providing for LogMeIn merging with Citrix' GoTo business in a Reverse Morris transaction. The deal was valued at $1.8 billion and would result in the merged entity owned equally by Citrix and LogMeIn shareholders. The combined company was expected to be a leading SaaS company, with innovative product portfolio, with combined annual revenue of more than $1 billion and serving over 2 million customers.

Analysts' Take

Barclays said in a note in October 2016 that deal is a game changer, as it thinks there are enough ways for the company to win apart from traditional synergies. Citing the higher overlap between both businesses, Barclays analyst Raimo Lenschow said he is confident of the company delivering more than the guided range of cost synergies, once the merger is complete.

MKM Partners, meanwhile, believes the spinoff would pave way for share buybacks for Citrix, helping to boost earnings per share by 4–8 percent, depending on the size/timing. The firm said in a note on January 9 that at current prices, there is a 4 percent arbitrage between Citrix and LogMeIn, down from 10 percent since its November 30 note on the transaction.

At Time Of Writing

  • Citrix shares were plunging 22.69 percent to $70.50.
  • LogMeIn shares were down 3.12 percent at $104.80.

Image Credit: Coolcaesar at the English language Wikipedia [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

Latest Ratings for CTXS

DateFirmActionFromTo
Oct 2019UpgradesUnderperformHold
Oct 2019MaintainsEqual-Weight
Oct 2019AssumesUnderperform

View More Analyst Ratings for CTXS
View the Latest Analyst Ratings

Posted-In: Analyst Color M&A News Stock Split Analyst Ratings Movers Tech Trading Ideas Best of Benzinga

 

Related Articles (CTXS + LOGM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
PLCEB. Riley FBRDowngrades59.0
ASPUCanaccord GenuityMaintains11.0
AAPLEvercore ISI GroupMaintains305.0
FCELCraig-HallumReinstates0.500
THTXMackie ResearchUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Corn and Wheat Futures Move Up

Twitter's Q4 Earnings On Tap: Will MAUs Get A Trump Bump?