Citrix Systems buys NetScaler for $302 M
By siliconindia staff writer   |   Thursday, 02 June 2005, 19:30 IST
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BANGALORE: The privately held NetScaler - a company co-founded by BV Jagadeesh has been acquired by Citrix Systems, a major access infrastructure solutions provider for about $302 million in cash and stock (around 45 percent cash and 55 percent stock), plus the assumption of approximately $23 million in unvested stock options. The deal, subject to approval, is expected to close in the third quarter of '05. Sequoia Capital, Goldman Sachs and Gabriel Venture are some of the investors in NetScaler. "This is an exciting acquisition for Citrix," said Mark Templeton, president and CEO, Citrix. NetScaler products will extend the Citrix Access Platform and provide a range of application networking solutions. Application networking is a fast-growing and emerging segment of the overall networking market, expected to grow to about $3 billion by '07, according to market research. NetScaler, founded in 1998, has approximately 200 employees, most of who work at its development facility in Bangalore. The company pioneered the market for next generation application networking acceleration and initially rose to prominence in the internet market, delivering technology to top companies such as Google, Amazon, Dow Jones. "This is a great move for Citrix and a great fit for NetScaler. Our combined teams will be a powerful force in providing the infrastructure required for intelligently controlling access and delivery of any application or resource based on the end-user's scenario. We expect the demand for NetScaler products will grow, as we leverage Citrix's 5,000 plus resellers in over 100 countries one of the most loyal channels in the industry," said Jagadeesh, president and CEO, NetScaler. Prior to NetScaler, Jagadeesh was co-founder and CTO of Exodus Communications, which rose to considerable prominence during the dotcom era and subsequently went bust. Exodus was sold by Jagadeesh and other founders for a significant amount much before its decline. Before Exodus, Jagadeesh co-founded Fouress, a software consulting company specializing in networking technologies, which eventually merged with Exodus in 1995. He has also held management and engineering positions at Novell and 3Com Corporation. Citrix said it would take a charge of $5 million to $6 million, or 2 cents to 3 cents per share, related to the acquisition in the third quarter. The deal is projected to add between $58 million and $60 million to revenue in 2006, it said. Shares of Citrix fell $2.52, or 9.9 percent, to close at $22.85 in Thursday trading on the Nasdaq Stock Market.

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