Avid Technology to Be Acquired by an Affiliate of STG for $1.4 Billion by Scott Simmons

August 10, 2023

The sale of Avid Technology (maker of video editing application Avid Media Composer as well as ProTools, shared storage and a number of other media creation technologies) has been rumored for quite a while. It’s now almost officially official as Avid has issued a press release titled Avid Technology Enters into Definitive Agreement to Be Acquired by an Affiliate of STG for $1.4 Billion. Avid let employees know about this decision on Wednesday about the time the announcement happened and has planned an all-employee meeting for Thursday. It was just on Tuesday that media analysts (at least I think they can be called “media analysts”) Devoncroft published an in-depth piece called Valuing Avid, Valuing the Industry’s Future. If you’re into following the twists and turns in this story, grab a coffee and dig into that one.

The full press release from Avid is pasted below.

But I think this Tweet sums it up best:

The end of an era…

— Marc Bach, C.S.I. (@marcplanb) August 10, 2023

What does this mean for the many Avid editors, shared storage owners and ProTools mixers out there? Time will only tell and speculation has run the gamut of ideas, such as selling off ProTools to creating a stand-alone shared storage company to licensing much of their technology to places they have never licensed it before.

Avid’s business models have shifted over the years as the market has shifted. There was a time when Avid resisted subscription pricing for Media Composer but now they embrace it. Many editors don’t realize that the actual Media Composer software is a small part of Avid’s overall revenue. That’s why the speculation that private equity could break apart the company and sell individual assets like media storage and ProTools is the leading theory. I mean, isn’t that a lot of what a private equity company does when they buy a business?

Time will tell and we’ll keep updating the story when we hear more.

There has been a lot of talk on Twitter X about it.

Avid MC was just sold. If that disrupts the NLE game, who do you think will pick up the slack?

— Jesse Koepke (@jessekoepkecuts) August 10, 2023

Yea I think MC is dead. It’s codebase is too ancient to be saved, so to modernize it would take a full ground up re-write. And ProTools sells WAY more then MC. I think the patents from MC get sold off or licensed off and the product just gets killed.

— Joey D'Anna (@joeydanna) August 10, 2023

Announced two years apart, nearly to the day, hard to believe they were also valued nearly identically. #Avid pic.twitter.com/qUCliPei3O

— Adam Kranitz (@adamkranitz) August 9, 2023

And now that they’re a “private company” their only stakeholders now are their customers. So let’s see them double down on taking care of them. I hope people don’t gloss over this and maybe hold them to this task

— Kevin Bourke (@BourkePR) August 9, 2023

As soon as I read “private equity firm” I knew AVID was dead. #avid

— Brian Mulligan (@BKMeditor) August 9, 2023

To me, this sentence says it all:

“Upon closing, this transaction will deliver immediate, significant and certain value to our stockholders.”

Notice they didn’t say “customers “

— Kevin Bourke (@BourkePR) August 9, 2023

Avid Technology Enters into Definitive Agreement to Be Acquired by an Affiliate of STG for $1.4 Billion

Stockholders to Receive $27.05 Per Share in Cash

Transaction Represents 32.1% Premium to Avid’s Unaffected Share Price on May 23, 2023

Avid to Become a Privately Held Company Upon Completion of the Transaction

BURLINGTON, Mass., Aug. 09, 2023 (GLOBE NEWSWIRE) — Avid^® (NASDAQ: AVID), a leading technology provider that powers the media and entertainment industry, today announced that it has entered into a definitive agreement to be acquired by an affiliate of STG in an all-cash transaction valuing Avid at approximately $1.4 billion, inclusive of Avid’s net debt. Under the terms of the agreement, Avid stockholders will receive $27.05 in cash for each share of Avid common stock. The cash purchase price represents a premium of 32.1% over the Company’s unaffected closing share price on May 23, 2023, the last full trading day prior to media speculation regarding a potential sale of the Company.

Avid Announcement - 1080x1080_TH

“Since our founding over 30 years ago, Avid has delivered technology that enables individuals and enterprises who create media for a living to make, manage and monetize today’s most celebrated video and audio content across the globe. We are pleased to announce this transaction with STG, who share our conviction and excitement in delivering innovative technology solutions to address our customers’ creative and business needs,” said Jeff Rosica, Avid’s Chief Executive Officer and President. “STG’s expertise in the technology sector and significant financial and strategic resources will help accelerate the achievement of our strategic vision, building on the momentum of our successful transformation achieved over the past several years. This transaction represents the start of an exciting new chapter for Avid, our customers, our partners and our team members and is a testament to the importance of Avid and our solutions in powering the media and entertainment industry.”

John P. Wallace, Chairman of the Avid Board of Directors, said, “This transaction is the result of a comprehensive review of strategic alternatives for Avid. Upon closing, this transaction will deliver immediate, significant and certain value to our stockholders. After carefully evaluating a variety of options, the Board determined that this transaction is in the best interests of Avid and its stockholders.”

William Chisholm, Managing Partner of STG added, “STG has admired Avid’s heritage as a category creator and pioneer in the media and entertainment software market for many years. We are excited to partner with Jeff and the management team to build on the Company’s history of delivering differentiated and innovative content creation and management software solutions. We look forward to leveraging our experience as software investors to accelerate Avid’s growth trajectory with a deep focus on technological innovation and by delivering enhanced value for Avid’s customers.”

Transaction Details

The transaction was unanimously approved by Avid’s Board of Directors and is expected to close during the fourth quarter of 2023, subject to Avid stockholder approval, regulatory approvals and other customary closing conditions. The transaction will be financed through a combination of equity and debt financing and is not subject to a financing condition. Upon completion of the transaction, Avid will become a privately-held company, and its common stock will no longer be traded on Nasdaq.

For further information regarding the terms and conditions contained in the definitive transaction agreement, please see Avid’s current report on Form 8-K, which will be filed with the U.S. Securities and Exchange Commission in connection with the transaction.

Second Quarter 2023 Results

Avid today will announce its financial results for the second quarter of 2023, which ended on June 30, 2023. The press release will be available on the Investor Relations section of the company’s website and the website of the U.S. Securities and Exchange Commission. In light of today’s announced transaction, Avid is cancelling its previously scheduled earnings conference call.

Advisors

Goldman Sachs & Co. LLC is serving as financial advisor to Avid, and Sidley Austin LLP is serving as legal counsel. Rothschild & Co is serving as financial advisor to STG, and Paul Hastings LLP is serving as legal counsel to STG. Sixth Street Partners and Silver Point are providing committed debt financing in support of the transaction.

Avid Powers Greater Creators

People who create media for a living become greater creators with Avid’s award-winning technology solutions to make, manage and monetize today’s most celebrated video and audio content—from iconic movies and bingeworthy TV series, to network news and sports, to recorded music and the live stage. What began more than 35 years ago with our invention of nonlinear digital video editing has led to individual artists, creative teams and organizations everywhere subscribing to our powerful tools and collaborating securely in the cloud. We continue to re-imagine the many ways editors, musicians, producers, journalists and other content creators will bring their stories to life. Discover the possibilities at avid.com and join the conversation on social media with the multitude of brilliant creative people who choose Avid for a lifetime of success.

About STG

STG is a private equity partner to market-leading companies in data, software, and analytics. The firm brings experience, flexibility, and resources to build strategic value and unlock the potential of innovative companies. Partnering to build customer-centric, market-winning portfolio companies, STG creates sustainable foundations for growth that bring value to existing and future stakeholders. The firm is dedicated to transforming and building outstanding technology companies in partnership with world-class management teams. STG’s expansive portfolio has consisted of more than 50 global companies. For more information, please visit www.STG.com.