American multinational computer software company Adobe has announced its plan to acquire online collaborative design platform Figma, for roughly $20 billion in cash and shares, which according to Bloomberg is the largest buyout of a private software company to date.
Adobe disclosed that it might need to finance this deal with a loan, which has provided a lukewarm outlook for the next quarter, with revenues expected to be $4.52 billion and EPS of $3.50, citing the overall macroeconomic environment and FX headwinds.
Adobe revealed that the acquisition of Figma is expected to come in the form of a deal that is half cash and half stock, and it will also include 6 million additional restricted stock units granted to Figma’s CEO and employees that will vest over four years subsequent to closing.
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Both companies expect the purchase to close sometime in 2023, subject to the receipt of required regulatory clearances and approvals as well as the satisfaction of other closing conditions, including the approval of Figma’s stockholders.
Looking at how small-but-fast-growing Figma has shown, executives at Adobe are positive that the acquisition will enable them to tap into demand from Figma users in a way that is complementary to the base of designers who use its existing software tools.
Design and prototyping, for individuals and teams, executed in a very streamlined and modern, cloud-based environment, are Figma’s product strengths, and it has so far amassed about 4 million users to date.
Adobe on the other hand has been building and acquiring a number of businesses in the wider world of digital creation, which has taken it not just into the larger and more general reaches of design, but also marketing and other areas adjacent to design in the longer creation chain.
The company is already dominant in so many of the tools that are used, and now it is making plans to be the dominant player in the platform, to bring in and provide all of these tools for designers.
Speaking on the acquisition of Figma, Chairman, and CEO of Adobe, Shantanu Narayen in a statement said;
“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions.
“The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”
Also commenting on this, Co-Founder and CEO of Figma Dylan Field said
“With Adobe’s amazing innovation and expertise, especially in 3D, video, vector, imaging, and fonts, we can further reimagine end-to-end product design in the browser, while building new tools and spaces to empower customers to design products faster and more easily”.
Few tech experts, while reacting to Adobe’s intention to acquire Figma, disclosed that Figma’s cloud-based designed software has no doubt been a growing headache for Adobe over the last few years, which has seen the design platform the most preferred choice for designers.
They further disclosed that Adobe felt threatened by Figma’s dominance, which is why they are making the move to purchase the design based platform.