Tue. Jun 18th, 2024

Bloomberg cites sources stating that Citrix Systems’ parent company, Cloud Software Group, is thinking about selling ShareFile, its content-sharing platform. This action most likely forms a part of a larger plan to optimize operations while operating under private equity control.

It has been stated that the corporation is evaluating interest from possible buyers in collaboration with a financial adviser.

With an estimated $1.5 billion in worth, ShareFile provides document sharing and collaboration tools that may be integrated with well-known programs like Microsoft Outlook.

The platform may draw attention from private equity groups, according to Bloomberg sources who requested anonymity; however, talks are still preliminary and might not result in a sale.

ShareFile’s disinvestment is viewed as a calculated strategic move by Cloud Software Group to return attention to its main expertise following user. In a words of Neil Shah – “First, the cloud-driven enterprise content management systems space has seen significant growth and competition from established players from Box, and Dropbox to Microsoft’s own SharePoint and OneDrive, as well as other strong contenders such as Egnyte, Kiteworks and Syncplicity.”

With cloud services (Azure), AI capabilities (CoPilot), productivity tools (Office 365), and file management solutions (OneDrive, SharePoint), Microsoft has been quickly growing its workplace products, enabling never-before-seen real-time communication.

“So, companies like ShareFile that are heavily dependent on or integrated with partners such as Microsoft, face increasing competition. ShareFile despite being one of the industry-leading solutions for more than a decade, the parent company is forced to evaluate ShareFile’s strategic future capabilities, positioning, and value vs a formidable competition, and now would be a good time to spinoff and profit from the business when it is at peak.” said Shah.

Following Citrix’s 2022 $13 billion takeover by Elliott Investment Management and Vista Equity Partners, a spinoff is reportedly being planned. As part of the agreement, a variety of goods and services were acquired by Cloud Software Group, the present parent company, which was formed by the merger of Citrix and Tibco Software. Cloud Software Group may be able to improve operations and resource allocation by simplifying the portfolio.

Financial restructuring is necessary, though, due to the leveraged buyout’s significant debt load. The $6.5 billion leveraged loan that Cloud Software Group just priced to renew the costly debt it assumed for the takeover is the largest in the US this year. The company has been diligently managing its debt.

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