Citrix Systems CEO to resign; gives Elliott Management board seat

The Fort Lauderdale-based technology company, which specializes in desktop virtualization services, announced significant organizational changes. The Connecticut-based fund Kamunting Street Capital Management L.P. revealed it had acquired a stake worth about 2.99% of the institutional investor’s stock portfolio in Citrix Systems.

In return for the concessions, Elliott agreed to a standstill for at least a year, agreeing to a number of voting and other provisions that essentially means Elliott will be largely cooperative. Along with this, the company also announced plans to appoint Jesse Cohn of Elliott Management Corp.to its board of directors. Citrix will commence a search for an additional independent board member, mutually agreeable to the company and Elliott, who will replace a current board member when appointed.

Citrix Systems (NASDAQ:CTXS) last posted its quarterly earnings results on Tuesday, July 28th.

Citrix on Tuesday also announced the formation of a board committee that would undertake a comprehensive review of its operations. Calderoni would also head a board committee that will search for a successor to Templeton, who has decided to stay at the company until a new chief executive officer is found. “Under his 20 years of leadership, Citrix has transformed to a $3b global technology leader”, said Thomas Bogan, lead independent director for Citrix.

“We appreciate Citrix’s constructive approach and are pleased to have worked collaboratively with the board and management team to reach this cooperation agreement”, said Cohn. “I’ll be intensely focused on driving us forward until we identify the best person to take the reins however long that may take”. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website.

The company also said it had engaged a financial adviser earlier this year in connection with a possible sale of its ByteMobile business, another Elliott target. Non-GAAP net income for the second quarter of fiscal 2015 was $163 million, or $1.00 per share.

Citrix reported earnings of $1 a share for the second quarter, above analysts’ estimates of 82 cents a share. “However, as a counter to these strengths, we find that the growth in the company’s earnings per share has not been good”. Equities research analysts forecast that Citrix Systems, Inc. will post $3.56 earnings per share for the current year.

Elliott, which owns 7.5 percent of the company’s common stock, publicly targeted Citrix in June, calling for changes such as cost overhauls, evaluating selling two of its units, buying back shares and recruiting more talented managers.

Templeton joined Citrix in 1995 and has served as its CEO since 2001.

For 2015, Citrix sees non-GAAP earnings between $3.65 a share to $3.75 a share on revenue of $3.22 billion to $3.25 billion. Citrix, founded in 1989, now has about 8,000 employees and has offices around the world.