Shares of Citrix (CTSX) rose on Tuesday after the software firm said it agreed to buy collaboration software startup and Slack rival Wrike for $2.25 billion in cash.
Shares of the Fort Lauderdale, Florida company rose 3.03% to $136.00 in early trading Tuesday.
Citrix said the deal, expected to close in the first half of 2021, will be neutral to its non-GAAP earnings per share and free cash flow through fiscal 2022, ending in Dec., and accretive thereafter.
Citrix said it expects to fund the transaction with a combination of new debt and existing cash and investments. Citrix has already secured a bridge loan from JPMorgan Chase Bank for $1.45 billion.
The transaction, which has been unanimously approved by the board of directors of both Citrix and Wrike, is subject to regulatory approvals.
"Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location," said Citrix President and CEO, David Henshall, in a statement.
On Tuesday, Citrix also reported earnings of $112.1 million, or 89 cents a share on revenue of $809.7 million. Adjusted earnings were $1.46 a share. Analyst estimates were for adjusted earnings of $1.34 a share and revenue of $781.6 million.
Wrike, owned by the technology-focused buyout firm Vista Equity Partners, was founded by Andrew Filev in 2006 and is also backed by Bain Capital Ventures and Scale Venture Partners.