Citrix To Expand Access Platform with Acquisition of NetScaler; Citrix Aggressively Driving Its Strategy to Enable the Best Access Experience for Every User and Every Application — Everywhere

Business Wire, June 2, 2005

FORT LAUDERDALE, Fla. -- Citrix Systems, Inc. (Nasdaq: CTXS), the global leader in access infrastructure solutions, today announced it has signed a definitive agreement to acquire privately held NetScaler, Inc., a global leader in high-performance application networking. The transaction is valued at approximately $300 million in cash and stock, plus the assumption of approximately $23 million in unvested stock options. The deal is expected to close in the third quarter of 2005 subject to customary closing conditions including shareholder and regulatory approvals.

NetScaler, founded in 1998, is based in San Jose, Calif., and has approximately 200 employees, with research and development teams in Silicon Valley and India. The company pioneered the market for next-generation application networking acceleration and initially rose to prominence in the Internet market, delivering technology to top companies such as Google, Amazon, Dow Jones, Earthlink, E*Trade, MSN and Ticketmaster. Today, NetScaler estimates that up to 75 percent of all Internet users go through a NetScaler system each day. NetScaler now has more than 500 enterprise customers and over 3,000 deployments of its award-winning products, including Fortune 500 leaders Merrill Lynch, JC Penney, 7-Eleven, Blue Cross, Ford and United Airlines, and is consistently ranked number one in both performance and customer satisfaction.

"This is an exciting acquisition for Citrix," said Mark Templeton, president and chief executive officer for Citrix. "We're aggressively pursuing the strategy we outlined in early 2003 to expand into high-growth markets adjacent to the access infrastructure market through building and acquiring best of breed access infrastructure technologies.

"With this acquisition, our existing customers will further lower costs and increase the performance of their Citrix Presentation Server systems, and we'll be able to offer greater performance and lower costs for customers deploying Web-based applications and services.

"NetScaler extends our best access experience value for the entire range of Web-based applications, including enterprise, browser-based, XML Web services, and others. And, with NetScaler accelerators, Citrix customers can significantly optimize their entire set of legacy, client/server, or three-tier applications delivered on our Presentation Server system," said Templeton.

"By adding NetScaler products to the Citrix Access Platform, we are the only company offering a complete system that provides end users with the best access experience and delivers cost-saving benefits to IT staffs through reduced overhead, enhanced security and increased manageability of all enterprise applications and resources."

Bringing a New Level of Intelligence to OSI (Open System Interconnection) Layers 4-7

NetScaler products will extend the Citrix Access Platform and provide a range of application networking solutions. Application networking is a fast-growing, emerging segment of the overall networking market expected to grow to about $3 billion by 2007 according to market research. Unlike traditional networking products that focus on the underlying connectivity between systems and networks, application networking solutions provide application layer intelligence called "application fluency." This ensures that every user receives the best possible access experience based on their role, device, network and location, as well as the specific application or service being accessed. And IT organizations can reduce the overall costs in their data centers by reducing network overhead and the number of servers needed to run enterprise applications.

While some traditional networking products may be "application-aware," only application networking products can make networks truly "application-fluent."

In addition, with NetScaler adding to the built-in intelligence of the system, the Citrix Access Platform will dynamically choose the best possible delivery method for each access session, automatically sensing and responding appropriately to each user's access scenario to deliver the best access experience.

Strong Execution on Citrix's Growth Strategy

In 2004, Citrix completed two acquisitions as part of its strategy to drive growth by offering the industry's most complete, integrated access platform. In the first quarter, Citrix acquired Expertcity, now the Citrix Online division, moving the company into the real-time collaboration, desktop access and on-demand assistance markets. In the fourth quarter, Citrix acquired Net6, now the Citrix Gateways division, extending Citrix's reach in the SSL VPN (secure socket layer virtual private network) and IP (internet protocol) telephony markets.

"This is a great move for Citrix and a great fit for NetScaler. Both companies are committed to making customers successful and improving the experience for end users accessing any application," said B.V. Jagadeesh, president and chief executive officer for NetScaler. "Our combined teams will be a powerful force in providing the infrastructure required for intelligently controlling access and delivery of any application or resource based on the end-user's scenario. Further, we expect that the demand for NetScaler products will grow significantly as we leverage Citrix's 5,000 plus resellers in more than 100 countries - one of the most loyal and well developed channels in the industry."