This is being reported by Avid sources has a positive movement, awarding the management the agility to complete its media platform transition, "connecting content creation with collaboration, asset protection, distribution, and consumption." For the audio industry, the news is just another reminder that nothing stays the same forever, as many of the early Pro Tools users have learned for quite some time, since the nostalgic Digidesign days.
Today, Avid offers a comprehensive range of content creation and media production tools for feature films, television shows, news programs and televised sporting events, as well as music recording and live concerts. Pro Tools, Sibelius and audio solutions represent nearly 40% of the company's business, with the rest being mainly the Media Composer (video editing) business combined with Avid NEXIS, MediaCentral, iNEWS, AirSpeed, FastServe, and Maestro broadcast and production systems.
More importantly, Avid's results have shown positive signs with most of its customer base already transitioned to subscriptions and services, while all its core tools now supporting cloud and collaboration features. STG valued Avid at approximately $1.4 billion, inclusive of Avid’s net debt. Under the terms of the acquisition, 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.
"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," says Jeff Rosica, Avid’s Chief Executive Officer and President.
Jeff Rosica joined Avid in 2013 at a difficult time for the company, having been temporarily delisted from the NASDAQ short after. In 2016, he would become President, and finally took over the reins as CEO in February 2018, following the troubled departure of Louis Hernandez Jr., fired after “workplace conduct” violations.
"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," Rosica states.
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."
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.
Avid also announced its financial results for the second quarter of 2023, which ended on June 30, 2023. The company reported total revenue of $108.5 million, an increase of 11.1% year-over-year or 13.0% at constant currency, with paid cloud-enabled software subscriptions revenues of $44.4M, reaching approximately 544,400 users.
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