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Citrix must Wrike what it sees because it's buying project management outfit for $2.25bn

No longer a corpo behemoth holdout

Citrix has confirmed plans to buy Wrike, a project management and team-based collaboration tool, for $2.25bn.

While the move is dwarfed by Salesforce's $28bn takeover of hipster chat and collaboration darling Slack, the purchase will see the combination serving over 400,000 customers over 140 countries.

The all-cash deal is expected to close later this year, and has received unanimous sign-off from directors in both camps.

Founded in 2006, Wrike is a relative veteran of SaaS-based project management. It includes cloud-based content creation tools, like those from Hubspot, while other features focus on keeping projects on track, similar to what you'd expect from Trello or Zenkit.

Unlike many of its competitors, Wrike hasn't yet been absorbed into a larger corporate behemoth (as was the case with Trello, bought by Atlassian in 2017), nor has it gone public, as Hubspot did back in 2014. It remains privately held, albeit with enterprise IT investment firm Vista Equity Partners holding the majority of shares. Previous investors include Bain Capital Ventures and Scale Venture Partners, with Wrike raising $26m across two rounds, according to Crunchbase.

According to financial disclosures, Wrike ended 2020 with over $140m in "recurring" revenue. Citrix expects revenues at its latest purchase to hit between $180m and $190m this year.

With Wrike, Citrix plans to sell into more areas of the enterprise, seeing its products reach marketing and project management as well as the IT furrow it is more accustomed to. The buy is the largest in the history of the virtualization company.

The announcement was made as Citrix unveiled its latest set of results [PDF], which showed revenues for the company's fourth calendar quarter flat year-on-year at $810m, although calendar year 2020 as a whole was up 8 per cent $3.236bn.

While a little disappointing considering the shift to remote working, the mix of those revenues changed markedly, with SaaS and other subscriptions growing from $113m and $80m in Q4 2019 to $150m and $191m respectively in the same period of last year. Product & licenses fell to $54m from $177m and support & services dropped to $415m from $439m.

For the year, SaaS and other subscriptions came in at $541m and $574m, rising 38 per cent and 121 per cent respectively. Product & licenses was $444m, down 24 per cent and support & services came down 6 per cent to $1.678bn.

Divisionally, the Workspace unit turned over $591m in sales in Q4, up 5 per cent and generated revenue of $2.4bn for the year, up 13 per cent. App Delivery and Security fell 11 per cent in Q4 to $189m and was down 4 per cent for 2020 to $721m.

Citrix recorded a reduced profit for the year of $504.4m versus $681.8m in the prior year, largely due to a rise in operating expenses and a one-off tax benefit in the prior fiscal.

Citrix's cloud productivity roster is fairly shallow when compared to some rivals. Its flagship product, Citrix Content Collaboration, is heavily geared towards bulkier enterprise clients with acute security needs, and is largely contained to cloud storage and document creation.

Wrike is a slightly different kettle of fish. For starters, it caters to smaller firms and enterprise behemoths alike. Beyond content creation, it heavily emphasises the day-to-day management of a project, including Gantt chart and time-tracking features.

Executives at both organisations issued canned statement but neither was particularly worthy of quotation.

Wrike will continue to operate as an independent business until the deal ultimately closes, with Andrew Filev, founder and CEO, reporting to Citrix CFO Arlen Shenkman. ®

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