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Citrix to Acquire Sequoia Software

Citrix Systems Inc. , a global leader in application server software and services, and Sequoia Software Corporation , a leading provider of XML-based portal software, Wednesday (March 21) announced that the two companies have signed a definitive agreement for Citrix to acquire Sequoia. The all-cash transaction, structured as a $5.64 per share tender offer, is valued at $184.6 million.

By adding Sequoia's portal products and technology to Citrix's existing application serving software, Citrix will be positioned to deliver a more complete application services platform – one that gives users secure access to any information source, business process or application, whether it's a Web, Windows or UNIX application.

"Since we introduced the Citrix NFuse application portal one year ago, customers have asked us to extend its capabilities even further to include Web content, Web applications and Web services," said Mark Templeton, president of Citrix. "The portal is the aggregation point for applications and information from disparate systems which makes it an essential piece of the complete solution, and therefore important for Citrix to provide."

"Additionally, this move will be instrumental in helping our channel deepen their customer relationships and grow their integration and implementation revenues. The acquisition of Sequoia gives us a robust suite of XML-based products and technologies to do exactly what customers want – to make it easy to use any device to find and get connected to any information from anywhere," Templeton said.

Mark Wesker, president of Sequoia, said the combination of the two companies would satisfy a broad range of customer needs, spanning a desire to ease application access to creating a true digital workplace.

"Citrix MetaFrame is the world's application serving standard," Wesker said. "Over 100,000 customers use MetaFrame to reap the benefits of application serving. By joining forces with Citrix, we will be able to offer customers a unified solution for creating the virtual enterprise, where employees, partners, customers and suppliers can access and interact with any information that is relevant to their needs from any device on any network."

Sequoia's and Citrix's products, personnel and sales model greatly complement each other and help Citrix execute on one of its key growth strategies – expanding the use of application serving within the enterprise, according to David Weiss, vice president of marketing for Citrix.

"With both MetaFrame XP and Sequoia XPS portal software, enterprise customers will be able to look to our systems integrators and channel partners as a single source for two key parts of their strategic applications platform," Weiss said. "By creating new products based on the same technology, we can also deliver the same benefits to mid-market customers, a segment already well served by our channel."

Templeton said the acquisition fits into Citrix's vision of a "Virtual Workplace" enabled by application serving software.

"Our core strategy, ever since our founding, has been to provide infrastructure software to allow people to easily connect to any application from anywhere, regardless of the device or network connection," Templeton said. "Historically, most of our customers have used our software to deploy Windows applications, and that is still true today. But with the explosion of bandwidth and connectivity brought about by the Internet, plus Web technologies such as Java and HTML, we believe CIOs are looking for flexibility to choose the right combination of Windows and Web applications to best suit their needs."

Terms of the Deal
Under the terms of the merger agreement, Citrix will acquire all the outstanding shares of Sequoia common stock at $5.64 per share for approximately $184.6 million in an all-cash tender offer. The tender offer is expected to commence the week of March 26, 2001. The acquisition has been approved by the board of directors of each company and, subject to customary conditions and approvals, including Hart Scott Rodino, is expected to be completed during the second quarter. Holders of a majority of the outstanding shares of Sequoia have agreed to tender their shares in the tender offer.

While the company expects that the transaction will be dilutive to earnings in fiscal 2001, it is expected to be accretive to earnings in fiscal year 2002.