Sequoia Software (Nasdaq: SQSW)rose 53 U.S. cents to $5.53 Wednesday morning after application software andservice company Citrix Systems (Nasdaq:CTXS) said it would buy the company for $5.64 per share in cash, or a totalof $184.6 million.
Citrix, meanwhile, fell $1.06 to $18.75, even as it said it remains “ontrack” to meet its financial goals.
The acquisition will allow it to deliver a “more complete” application services platform, Citrix said. Sequoia, which makes e-business software, counts among its customers and partners Cap Gemini Ernst & Young, Kaiser Permanente and Lehman Brothers.
Citrix plans to begin a tender offer for Sequoia shares next week. Holdersof a majority of the shares have agreed to the merger, which is scheduled tobe completed next quarter. Citrix, based in Fort Lauderdale, Florida, said it expects the acquisition to hurt results this year, but boost earnings in fiscal 2002.
“Our business has continued to grow, and given the substantive nature of theSequoia Software acquisition and our visibility within the quarter, we canreaffirm the guidance that was provided in January, as we are on track todeliver upon those expectations,” said Citrix chief financial officer JohnCunningham.
In January, Citrix reportedly predicted sales and profits would grow by morethan 20 percent this year.
Sequoia, based in Columbia, Maryland, went public last May at $8 per share. The shares have since traded ashigh as $21.75 and as low as $1.66.