IBM / Cisco Eyeing Acquisition of Citrix?

Citrix logo

Good thing we have a ‘Rumors’ category to assign to this type of speculations: several news outlets are running a story about Citrix possibly being an acquisition target for Cisco or IBM.

Citrix logo

A late April fool, or plausible?

Nasdaq traders bid up Citrix stock Tuesday on takeover rumors that have either IBM or Cisco purchasing the application delivery vendor.

Citrix’s stock went from a low of $30.60 Tuesday to a high of $33.75. Rumors of Citrix being purchased fueled the higher trading prices, says Jeffrey Gaggin, an enterprise software analyst for Avian Securities. Gaggin cautions that he has no way of knowing whether the rumors hold any truth.

But it would make sense for IBM or Cisco to purchase Citrix because Citrix’s acquisition of XenSource last year made it a strong player in the virtualization market, Gaggin says.

TheStreet adds the following financial analysis:

But even at what seems like a bargain price, Citrix isn’t cheap: With a market cap of $6 billion and expected revenue growth of 17% to $1.63 billion this year, the stock could command a fair premium, taking the potential buyout price north of $7 billion, assuming a premium of 15%.

IDC analyst Stephen Elliot sees some rationale for IBM and Cisco to go after Citrix. IBM could make the XenSource hypervisor its preferred brand and could better compete against VMware and Microsoft. This would run counter to H-P’s strategy, which has professed to being indifferent on the hypervisor question, Elliot said.

On Citrix’s side, IBM would lend “a lot more credibility” to the XenSource virtualization platform and provide development resources. “There are a lot of opportunities,” Elliot said.

[Source: ChannelWeb]

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