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.)

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels 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. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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