Citrix Acquires Expertcity In $225 Million Deal

The deal dramatically expands Citrix's footprint from the server to the desktop access market and into the online help desk and call center software service market. Expercity's products include GoToMyPC software service for secure, browser-based access to desktop PCs, and GoToAssist software service, an online help-desk and call-center assistance offering.

"This boosts Citrix's position in the small-medium business space," said Evan Leonard, president of CHIPS Computer Consulting LLC, a national solution provider headquartered in Lake Success, New York who sells both Citrix and Expertcity products. "GoToMyPC is a nice, inexpensive solution for companies that couldn't afford Citrix, and GoToAssist gives Citrix a position in the network management arena. This deal makes it that much harder to compete against Citrix in the thin client market."

Leonard praised Expertcity for being "very channel friendly and very flexible and very aggressive to even some of the smaller solution providers. Citrix needs to maintain that mentality." He predicted that deal will dramatically accelerate the acceptance of Expertcity's offerings into the enterprise market through Citrix's channel.

Citrix, for its part, said that Expertcity will continue to operate in Santa Barbara, Calif., led by Andreas von Blottnitz, Expertcity's current president and chief executive officer.

Ross Brown, vice president of worldwide channels and operations for Citrix, said it will take the next three months to figure out how Citrix packages and goes to market with the Expertcity offerings. Citrix will likely provide some additional details on the Expertcity deal at its Citrix Solutions Summit in Orlando, Fla., to be held Jan. 12 through Jan. 14.

"One of the things that led us to the table with Expertcity was our attraction to their [subscription based services] model and their attraction to our channel network," said Brown. "We think there are some synergies, but how it is going to get packaged and go to market will be worked out over the next three months. There is a lot of value between us as it relates to the channel."

Under terms of the agreement, Citrix will acquire Expertcity for approximately $225 million, payable in approximately 50 percent cash and 50 percent stock. A $12 million earn out will be paid to all Expertcity stockholders if certain financial targets are achieved in 2004.

The acquisition has been unanimously approved by the board of directors of each company and is subject to regulatory review and approval by stockholders of Expertcity.

The acquisition is expected to close during the first quarter of 2004 or early in the second quarter of 2004.