Citrix Systems Inc., the cloud-services company conducting strategic and operational reviews, is planning to spin off its GoToMeeting business rather than sell the online meeting organizer, people with knowledge of the matter said.
As a standalone business, GoTo could have a market value of about $4 billion, said one of the people, who asked not to be identified because the discussions are private. Citrix explored a sale for the unit and didn’t find a buyer, the person said. Citrix has a market value of about $12 billion.
Citrix in July reached a standstill agreement with activist shareholder Elliott Management Corp., and added Elliott’s Jesse Cohn to the board. Elliott owns about 7.5 percent of Citrix. As part of a series of announcements on July 28, Citrix said its board would perform a “comprehensive operational review” and had “initiated a review of strategic alternatives for the GoTo family of products” that included a possible sale or spinoff.
Representatives of Citrix and Elliott declined to comment.
Cohn criticized Citrix in a June 11 letter for struggling operationally and missing “profound value creation” opportunities. One of his recommendations was either to spin off or sell the GoTo franchise, which he said was 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,” Cohn wrote in the letter. “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.”