Back in April I speculated on a rumor that Citrix was considering selling or spinning off its online services unit including the GoToMeeting, GoToWebinar, and GoToTraining conferencing products.
This week Citrix announced that CEO Mark Templeton would retire. In a Facebook post he said "It remains business as usual at Citrix and there will be no impact in how you do business with us." But then he said "We have announced the exploration of strategic alternatives for our GoTo family of products as well as active discussions regarding a potential sale of our ByteMobile business."
That mirrors this formal statement from the July 28 Second Quarter Financial Results report:
Commences Exploration of Strategic Alternatives for GoTo Family of Products
In addition, Citrix, with the assistance of its independent advisors, has initiated a review of strategic alternatives for the company’s GoTo family of products. The strategic alternatives review for this business could result in, among other things, a possible sale or spin-off transaction.
Qatalyst Partners and Goldman, Sachs & Co. are serving as financial advisors to Citrix and Goodwin Procter LLP is serving as legal counsel.
All of this action follows a public letter last month from Elliott Management Corporation. They bought up enough Citrix stock to trigger a formally mandated 13D SEC filing and wasted no time in flexing their muscles as significant shareholders. It was not pleasant, highlighting analysis such as:
“The Company’s execution has been terribly poor for more than 2 years, and we believe management will be compelled to make more organizational changes going forward – beyond those already announced.”
Elliott made it clear that the online division and conferencing products needed to go:
"While we recognize the broad notion of empowering a mobile workforce, this business’s go-to-market strategy, product development roadmap and end-market are absolutely distinct from the core of Citrix. GoTo is an attractive business with scale in its market, and we have confidence that it can realize significant value through several alternative transaction structures, including a sale or a spin. We also further believe that core Citrix’s management can create significantly more value for stockholders by focusing on operational execution rather than attempting to oversee the GoTo franchise."
In re-reading my previous article about what could happen to Citrix Online (and I want to stress again that I have NO insider knowledge and no financial involvement in any way), I'm going to strengthen my guess… What would be best for customers and easiest to implement quickly? Spinoff of the unit into its own corporate entity. What do I think will happen? PGi will buy it.
Now we sit back and see how well my crystal ball works. I'm sure we won't have long to wait.