Citrix Systems Inc.
), a leading provider of virtualization, networking and cloud
computing solutions has completed the acquisition of mobile
security startup company Zenprise. Citrix previously signed a
definitive agreement to acquire Zenprise on December 5, 2012 for
an undisclosed amount.
Following the deal, Citrix will integrate Zenprise's mobile
device management solutions with its Cloud Gateway and Me@Work
solutions for managing mobile applications and data. Users of
this technology can get access to any application from any device
allowing them the freedom to work remotely.
Zenprise mobile application provides additional security to the
employees' personal phones and devices from the hackers. It also
segregates employees' personal and professional data thereby
reducing the chance of giving full access of personal information
to their employers.
The mobile security market is really booming, based on the demand
from large corporations to have mobile applications that will
allow its employees to work from remote locations.
Zenprise, which is backed by venture capitalist and private
equity firms, has a million plus users, and its customers include
Monsanto, Boston Red Sox and
Research In Motion Limited
). The new partnership could bring competition in the enterprise
segment for the Blackberry maker, which is well known for
providing secured mailing system for its customers.
The company foresees its 2013 top line to climb 14% year over
year and its non-GAAP operating margin to improve 0.5% year over
year mainly fuelled by strong demand of its popular cloud
computing products like GoToMeeting, GoToMyPC, ShareFile and
social networking site Podio. We believe that Zenprise
acquisition will enable Citrix to develop a complete suite
including GoToMeeting, Podio and ShareFile. The shareholders have
responded positively following the acquisition as the stock has
leaped 13.81%, since the date of the initial announcement of the
Meanwhile, the ongoing macroeconomic uncertainty may act as a
headwind for the company as it restricts several firms from their
targeted IT spending. Additionally, high cost associated with
virtualization may restrict the long-term prospect of Citrix.
Finally, increased competition from
) provides certain downside risks for the company.
Considering these factors, we maintain our long-term Neutral
recommendation on Citrix Systems. Currently, it holds a
short-term Zacks # 3 rank (Hold).
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