Citrix mulling potential sale after tumultuous 2021

Share prices have tumbled due to consecutive quarters of "mixed" financial results

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15 September 2021 | 0

Citrix is considering finding a buyer for itself to rejuvenate its fortunes after a shaky 2021 in which its share price has fallen to levels not recorded since mid-2019.

The virtualisation and workplace collaboration software firm is working with advisers to consider the benefits and drawbacks of selling itself, according to Bloomberg, with plans to approach potential buyers within weeks.

A final decision hasn’t been made on whether to proceed with a sale, regardless of whether the company finds a buyer, however. Citrix might also yet remain a standalone firm.

 

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The firm has, in recent months, struggled to capitalise on a catalogue of successes over the last couple of years, with share prices dropping sharply in April 2021. Citrix encountered supply chain issues in the first three months of the year, which led to the company missing its revenue targets.

These supply chain issues affected hardware shipments and the company also generated a lower-than-expected duration of on-premise licenses. This is despite the company handling a much higher demand for its software and services during the pandemic than Citrix otherwise would have expected.

Exemplifying this decline was the fact its flagship Workspace suite of tools and services recorded declining year-on-year revenues of 11%, while its app delivery and security revenues also fell by 6% against the first three months of 2020.

It was a similar story for the second quarter of the year, with shares falling further thanks to a “mixed” financial performance. CEO David Henshall pinned these difficulties on “sales execution challenges” caused by complexity in managing a rapid transition to the cloud among customers while managing different license model types.

The company has also had to endure a rocky few months due to a string of security issues, most notably in May 2019 in which an attack saw hackers seize 6TB of sensitive data. Since then, there have been a number of minor incidents, with cyber criminals taking advantage of flaws in Citrix systems.

The potential move comes after Elliot Management recently took more than a $1 billion stake in Citrix, as of last week, according to the Wall Street Journal).

The firm has previously explored the option of selling itself in 2017, Bloomberg adds, although discussion with potential buyers stalled at the time due to differences in opinion over the valuation of the company.

© Dennis Publishing


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