Citrix Acquires Expertcity

In its largest acquisition to date, Citrix Systems Thursday inked a definitive agreement to acquire Expertcity, a provider of Web-based desktop access and help-desk services, for $225 million in cash and stock.

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 the GoToMyPC software service for secure, browser-based access to desktop PCs, and the 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, a solution provider in Lake Success, N.Y., that 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," he said. "This deal makes it that much harder to compete against Citrix in the thin client market."

>> The deal expands Citrix's competitive edge and position in the desktop access market.

Citrix said that Expertcity will continue to operate in Santa Barbara, Calif., led by Andreas von Blottnitz, Expertcity's current president and CEO.

Ross Brown, vice president of worldwide channels and operations at 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. "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 earnout will be paid to Expertcity stockholders if certain financial targets are met in 2004.

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