LogMeIn Acquires Citrix GoTo Business for $1.8B
New combined company will be better positioned to compete against Cisco WebEx and other rivals.
Citrix and LogMeIn have announced a definitive merger agreement bringing Citrix's GoTo product suite to LogMeIn in a deal that is valued at $1.8 billion.
Citrix's GoTo products include GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice, while LogMeIn provides cloud-based connectivity products.
"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," Bill Wagner, President and CEO of LogMeIn, said in a statement. "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."
Following the completion of the merger, Wagner will lead the combined company. Bob Calderoni, Executive Chairman of Citrix, commented that Citrix first announced plans to spin off the GoTo family of products last November. Kirill Tatarinov, President and CEO of Citrix, also sees the sale as a winner for his company.
"Both LogMeIn and GoTo have a shared goal of developing innovative solutions to exceed customer expectations by simplifying business and personal communications," Tatarinov said 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."
For Citrix, unloading its GoTo assets is also about enabling the company to focus on its core business of application delivery. Citrix also announced its second quarter fiscal 2016 financial results on July 26, with revenue up by six percent year-over-year to $843 million. Net income was reported at $121 million, up from $103 million in the second quarter of fiscal 2015. Looking forward, Citrix provided third quarter fiscal 2016 guidance for revenue in the range of $820 million to $830 million.
During the earnings call, Tatarinov was asked about the rationale for merging the GoTo products with LogMeIn, rather than just spinning out an independent company.
"Essentially we're creating a new company which is at scale, at much larger scale compared to both LogMeIn and GetGo, if we were to spin it off into the independent company," Tatarinov said.
Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.