Adobe to acquire Figma for US$ 20 billion

Combination aims at ‘collaborative creativity'

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Adobe smartphone apps for IOS Image Adobe website
Adobe smartphone apps for IOS Image Adobe website

San Jose California-based Adobe announced on 15 September that it has entered into a definitive merger agreement to acquire Figma, a leading web-first collaborative design platform, for approximately US$ 20 billion (approximately Rs 160,000 crore) in cash and stock. The company press release says the merger will usher in a new era of collaborative creativity.

Adobe is well known to the publishing and media industry for its transformative software products starting with Adobe PostScript which made print publishing tractable especially for non-Roman languages including Indian languages and scripts. Today, Adobe’s tools and platforms are ubiquitous throughout the digital economy. From revolutionizing imaging and creative expression with Photoshop and pioneering electronic documents through PDF, Adobe through its tools seeks to dominate many aspects of new digital experiences.

Figma founded by Dylan Field and Evan Wallace in 2012, has pioneered product design on the web. It provides tools for designing interactive mobile and web applications to collaborate through multi-player workflows. Its sophisticated design systems and rich, extensible developer ecosystem has attracted a new generation of designers and developers and a loyal student following.

Figma’s web-based, multi-player capabilities will accelerate the delivery of Adobe’s Creative Cloud technologies on the web, making the creative process more productive and accessible to more people.

Figma has a passionate community that develops and shares everything from tutorials to templates to plug-ins with their large and growing ecosystem. The combination of Adobe’s and Figma’s communities will bring designers and developers closer together to unlock the future of collaborative design.

“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, chairman and CEO, of Adobe. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”

Figma's home pages speaks collaboration Image Figma
Figma’s home page speaks collaboration
Image Figma

Figma has a total addressable market of $16.5 billion by 2025. The company is expected to add approximately $200 million in net new ARR this year, surpassing $400 million in total ARR exiting 2022, with best-in-class net dollar retention of greater than 150 percent. With gross margins of approximately 90 percent and positive operating cash flows, Figma has built an efficient, high-growth business.

“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,” said Dylan Field, co-founder and CEO, Figma.

Transaction details

Under the definitive agreement, Adobe has agreed to acquire Figma for approximately US$ 20 billion, comprised of approximately half cash and half stock, subject to customary adjustments. Approximately 6 million additional restricted stock units will be granted to Figma’s CEO and employees that will vest over four years subsequent to closing. Adobe expects the cash consideration to be financed through cash on hand and, if necessary, a term loan. The transaction is expected to close in 2023, subject to the receipt of required regulatory clearances and approvals and the satisfaction of other closing conditions, including the approval of Figma’s stockholders.

After the closing of the transaction, Dylan Field, Figma’s co-founder and CEO, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. Until the transaction closes, each company will continue to operate independently.

(The author has broadly based this article on a press release from Adobe dated 15 September 2022.)

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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