SWALLOW: Adobe to Acquire Rival Software Design Firm Figma for $20 Billion in Cash and Stock
Posted on 09/15/2022
Adobe Inc. announced that it will acquire design software firm Figma, Inc. in a deal worth about US$ 20 billion in cash and stock. Upon official news of the deal, shares of Adobe sank 17%, their biggest plunge since 2010. Some of the largest shareholders in Adobe besides ETF giants like Vanguard Group Inc., BlackRock, and State Street, include Polen Capital Management LLC, Primecap Management, MFS, Fisher Investments, and AllianceBernstein. Under the definitive agreement, Adobe has agreed to acquire Figma for approximately $20 billion, comprised of approximately half cash and half stock, subject to customary adjustments. Approximately 6 million additional restricted stock units will be granted to Figma’s CEO and employees that will vest over four years subsequent to closing. Adobe expects the cash consideration to be financed through cash on hand and, if necessary, a term loan. The transaction is expected to close in 2023, subject to the receipt of required regulatory clearances and approvals and the satisfaction of other closing conditions, including the approval of Figma’s stockholders. Upon the closing of the transaction, Dylan Field, Figma’s co-founder and CEO, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. Until the transaction closes, each company will continue to operate independently.
Advisors
Allen & Company LLC is serving as financial advisor to Adobe and Wachtell, Lipton, Rosen & Katz is serving as legal advisor in connection with the transaction.
Figma was founded in 2012 and it creates cloud-based design software that allows teams to collaborate in real time. It competes head-to-head with Adobe’s XD program.
Figma was valued at US$ 10 billion in its last funding round in 2021. Figma’s backers include Index Ventures, Greylock Partners, and Kleiner Perkins Caufield & Byers. Figma raised US$ 25 million in a Series B round in February 2018 in a round led by Kleiner Perkins and joined by Greylock Partners and Index Ventures. Sequoia Capital led the Series C round in 2019.