Business conferencing and communications company LogMeIn (LOGM) - Get Report and the GoTo unit of Citrix Systems (CTXS) - Get Report are merging, the companies said Tuesday.

LogMeIn will pay Citrix $1.8 billion in stock, and shareholders of the companies will each hold 50% of the post-merger company. Citrix, which had already planned to spin off GoTo, will give the surviving company $25 million in cash. Both companies also reported second-quarter earnings.

Shares of LogMeIn gained $14.09, or 20%, to $83.80 in after-hours trading.

Citrix dropped $1.79, or 2%, to $87.54. The equity payout is tax-free to Citrix and shareholders. Mizuho Securities analyst Abhey Lamba wrote in a report that the amount of LogMeIn stock comes to about $12 per share for Citrix investors.

LogMeIn CEO Bill Wagner will lead the company, which will have its headquarters in Boston.

Wagner described GoTo as a "pioneer" and LogMeIn as a "disruptive" presence in the market. LogMeIn's products are "great entry points" for individuals who could "graduate" to GoTo's products as they get larger.

GoTo forecasts $680 million in 2016 sales, while LogMeIn expects $334 million in sales. The companies expect $65 million in savings during the first year and aim to reduce $100 million in costs during the second year.

Citrix had long planned to divest the GoTo business. The company said in November 2015 that it would spin off the collaboration and communications unit, which includes the GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice brands. Citrix acquired mobile cloud business Grasshopper last year for $161.5 million.

LogMeIn chairman Michael Simon will chair the post-merger company. The board will have nine directors, with LogMeIn appointing five and Citrix four.

The deal is expected to close in the first quarter of 2017.