Citrix Systems (NASDAQ:CTXS), which agreed to be sold to PE firms for $16.5 billion in late January, fell 2.3% amid the announcement of Zendesk's (NYSE:ZEN) deal to sell itself to a PE consortium at a price almost half of what it turned down in February.
Investors are concerned about Citrix's (CTXS) planned sale to Elliott Management/Vista Equity and other leveraged buyout deals including Sailpoint Technologies (NYSE:SAIL) sale to Thoma Bravo after Zendesk agreed to a deal for $77.50 after the software company originally rejected a bid for the company for between $127 and $132 a share in February.
The price cut also follows a price reduction in Anaplan's sale to Thoma Bravo, which was cut to $63.75/share from $66 in cash earlier this month. The deal closed on Wednesday.
Citrix (CTXS) saw some positive news on Tuesday when Dealreporter said financing and regulatory approvals are moving forward in the company's sale to Vista Equity and Elliott's Evergreen Coast Capital. A $15 billion syndicate debt deal is set for next month and a bond offering earlier this month was oversubscribed, according to a Dealreporter item.
Citrix rose 5.8% last Friday after the company filed with the European Commission for the sale to Elliott and Vista Equity. The provisional Phase 1 deadline was set for July 22.
Investors may have reason for some concern. Last Thursday, Orlando Bravo, founder of tech private equity giant Thoma Bravo, said he believes that there is more pain to come for the technology sector.
"I think there's more pain to come, I do," Bravo said last Thursday in an interview on CNBC. "When those companies really start getting down to answer the investors questions that you mentioned, the path to the profitability, they are not going to love the what they see."