Back in November, Citrix announced that it would spin out the GoTo family of products (see Citrix to spin out Goto products, will cut ‘investment’ in Podio). The company cut 1,000+ employees, and considered various options, under pressure from activist investor Elliott Management Group demanded changes. Today, the other shoe has fallen, with remote access software company LogMeIn announcing that it will acquire the kit-and-kaboodle from Citrix for $1.8 billion.
The deal has been approved by both companies, and will be structured as a ‘reverse Morris Trust’ which is a simultaneous spin out and merger, which will lead to a zero tax hit for Citrix.
The combined company should have revenues of over $1 billion.
It seems that the CEO of LogMeIn, Bill Wagner, believes in the synergies between a remote access software company and collaborative communications like the GoTo family, including GoToMeeting, GoToAssist, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice. Which, once upon a time, remote access software company Citrix also believed in. But now LogMeIn will be taking another run at that. (Or maybe there’s more synergy between companies that use capital letters to create HardToType company names?)
I think GoToMeeting and its siblings are in a crowded and commoditized market, with real pressure from the low end of the market by Google Hangouts, Join.me, Zoom, and others. I think Citrix has done well to walk away.
Not part of the deal is the somewhat-orphaned work media product, Podio, which is has been folded into the Cloud products at Citrix, like ShareFile. Citrix declared that it was decreasing its investments in that product in November, but not closing it down. In March, development for Podio was moved to Raleigh North Carolina.