LogMeIn merges with Citrix GoTo products in $1.8bn Reverse Morris move

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LogMeIn is to acquire Citrix’s ‘GoTo’ product range in a transaction rated at $1.8bn (£1.37bn).

The new company will be headed up by LogMeIn CEO Bill Wagner, and will feature the likes of GoToMeeting, GoToWebinar, and OpenVoice from the Citrix side, as well as join.me, LastPass, and BoldChat from LogMeIn. The move is going ahead under what is known as a Reverse Morris Trust agreement, whereby a spin-off is combined with a pre-arranged merger in order to, in the case of Citrix, shed one of its divisions without paying taxes on it.

“We believe this combination is a winning outcome for all parties,” said Kirill Tatarinov, Citrix president and CEO in a statement. “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,” Tatarinov added.

“We are extremely excited about this transformative merger and the profound benefits it will bring to our customers, our people and our shareholders,” said Wagner. “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.”

In a presentation deck given to shareholders (PDF), both companies argue that the manoeuvre puts the combined company at more than $1bn in anticipated annual revenue, with approximately two thirds of that being from the GoTo arm. This figure would put the new company in the top 10 of global SaaS firms by revenue. In terms of product roadmap, the three different facets of the business are collaboration, identity and access management (IAM), and service.

The move by Citrix to shed its conferencing and UC division is an interesting one given the company’s strategy in other areas. On the enterprise mobile side, Citrix appears to be making strong plays – not least with the firm’s partnership renewal with Microsoft back in May.

 

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