Adobe to Buy Creative Software Giant Figma for $20 Billion

UTC by Godfrey Benjamin · 3 min read
Adobe to Buy Creative Software Giant Figma for $20 Billion
Photo: Depositphotos

The merger of the Figma business with that of Adobe will set both companies on a new path with which they can dominate the creative industry. 

American multinational computer software company Adobe Inc (NASDAQ: ADBE) has announced it has reached a preliminary agreement to acquire Figma, a web-based collaborative design platform. As announced by the Delaware-incorporated company, the deal is sized at $20 billion, and about half of it will be paid for in cash with the other half paid for by stock.

Considered one of the high-profile deals this year similar to the $69 billion acquisition of Activision Blizzard Inc (NASDAQ: ATVI) by Microsoft Corporation (NASDAQ: MSFT) earlier this year. The Adobe acquisition of Figma is dependent on customary regulatory closing conditions.

Adobe is a firm that pioneered so many innovations in the creative industry. The company is particularly known for pioneering creative solutions through Photoshop. Besides, it debuted the PDF files form of sharing documents and through its Adobe Experience Cloud, the firm has continued to push the limits of what is considered possible in the creative world.

Should the Figma acquisition be made possible, it will further set Adobe on a new pedestal, as Figma’s technology is as innovative as the one it churns out. Figma is specifically focused on creating a system for everyone “who designs interactive mobile and web applications to collaborate through multi-player workflows, sophisticated design systems, and a rich, extensible developer ecosystem.”

“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.”

The stock option of financing the acquisition will involve giving Figma’s Chief Executive Officer, Dylan Field, and other major stakeholders in the company a total of 6 million shares.

The cash balance may be sourced through a term loan. With the deal billed to close in 2023, the duo of Adobe and Figma are going to be operating independently. Upon completion of the transaction, Dylan Field will be in charge of the Figma brand and will be reporting to David Wadhwani, president of Adobe’s Digital Media business.

Adobe and Figma Merger: Building a Functional Creative Business

The merger of the Figma business with that of Adobe will set both companies on a new path with which they can dominate the creative industry.

Per the announcement, Figma has an addressable market of $16.5 billion and is set to add $200 million in ARR to maintain its relative productivity as a business. These impressive financials will add to Adobe’s bottom line as both companies look to forge a new future together.

“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.

Besides the two companies, the robust community of creators and customers in both firms’ ecosystems will also be among the beneficiaries of the deal in the long run.

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