LogMeIn will merge with Citrix's GoTo business in a transaction valued at approximately $1.8 billion based on shares to be issued and LogMeIn's closing price of $65.31 as of July 25, 2016.
The deal combines two popular applications for collaborating online. The combined company is expected to have annual revenues in excess of $1 billion with more than two million customers.
The companies cited cost saving synergies of $65 million within the first year post-close, and run rate cost synergies of more than $100 million in year two.
Bill Wagner, President and CEO of LogMeIn, who will lead the combined company as President and CEO, commented, “We are extremely excited about this transformative merger and the profound benefits it will bring to our customers, our people and our shareholders. Both companies have passionate employees who are committed to developing easy-to-use software that simplifies the way we connect with people, devices, apps and products. The additional scale of the combined company will allow us to accelerate innovation in order to deliver better outcomes for our customers and also creates a compelling financial model that will reward our shareholders.”
Kirill Tatarinov, President and Chief Executive Officer of Citrix, said, “We believe this combination is a winning outcome for all parties. Both LogMeIn and GoTo have a shared goal of developing innovative solutions to exceed customer expectations by simplifying business and personal communications. Given that we have already been working towards a spinoff of GoTo, we expect this to be a smooth transition for the business. From Citrix's perspective, this transaction will allow us to further enhance our strategic focus, operational efficiency and accelerate execution of our strategy to provide the world's best integrated technology services for secure delivery of apps and data.”