Citrix to merge GoTo with competitor LogMeIn in $1.8B tax-free deal, LogMeIn CEO Bill Wagner to lead combined company; LogMeIn stock up 19%+ after hours
Dylan Martin / BostInno :
Context & Ripple Effects
This closes an exit Citrix has been shopping since mid-2015, when it first said it wanted to unload the GoTo business while refocusing on enterprise customers, followed months later by a plan to spin GoTo off as a standalone company under Chris Hylen. Instead of a lonely spinoff, GoTo is now merging directly into LogMeIn in a $1.8B tax-free structure — handing the assets to a serial acquirer that had just bought LastPass for $110M plus milestones.
First-order effects
- LogMeIn shareholders capture most of the upside immediately — the stock jumps more than 19% after hours — and its CEO Bill Wagner takes over leadership of the combined company rather than Hylen.
- Citrix completes its retreat from consumer-ish collaboration tools, freeing it to concentrate on the enterprise business it has prioritized since cutting 1,000 jobs alongside the spinoff plan.
Second-order effects
- The merger folds GoTo's product line into a LogMeIn portfolio already expanded via LastPass, giving the combined company a bundle of remote-access, password-management and collaboration tools to sell together — pressure that later shows up in LogMeIn's continued rollup with the $342M Jive Communications VoIP acquisition.
Third-order effects
- Consolidated remote-work software proved attractive to financial buyers: LogMeIn was subsequently taken private by Francisco Partners and Elliott Management at about $4.3B, and Elliott later surfaced in advanced talks to buy Citrix itself — the two halves of this deal both ending up in PE hands.
The trend: Legacy remote-access and collaboration software is consolidating through mergers and rollups before passing into private-equity ownership.