Adobe Inc.'s planned acquisition of online design platform Figma Inc. ranks as Adobe's largest deal to date.
San Jose, Calif.-based Adobe agreed to acquire Figma in a cash-and-stock deal worth about $20 billion, a Sept. 15 news release said. Figma stockholders will get about $10 billion in cash and approximately $10 billion in stock, subject to adjustments.
Adobe intends to fund the transaction's cash portion using cash on hand and, if needed, a term loan. The company will also issue about 6 million additional restricted stock units to Figma co-founder and CEO Dylan Field and employees across a four-year period post-deal completion.
Field said in an official blog post that the deal has been in the works over recent months. The executive said Figma will continue operating autonomously under Adobe despite the upcoming "big change."
The reported deal value is 2x Figma's current valuation of $10 billion, which it reached in 2021 after raising almost $200 million in a series E funding round with the help of several private equity investors.
Adobe's biggest acquisition prior to Figma was its $4.75 billion purchase of marketing software provider Marketo Inc. in 2018. The company's recent acquisitions include work management platform Workfront Inc. in 2020 for $1.5 billion and cloud video software company Frame.io Inc. in 2021 for about $1.28 billion.
Adobe unveiled the Figma acquisition against the backdrop of fiscal fourth-quarter revenue guidance that fell short of Wall Street expectations. The diversified software-maker expects revenue for the quarter to hit $4.52 billion, lower than analysts' projections of $4.60 billion.
Nevertheless, Adobe managed to achieve 15% year-over-year revenue growth on a constant currency basis for its fiscal third quarter to $4.43 billion.
Adobe Chairman and CEO Shantanu Narayen expressed confidence in the company's future after acquiring Figma, even as Adobe deals with an increasingly widening customer base that includes students, creative professionals and businesses.
"We are in the golden age of design, and we believe we have a unique opportunity to usher in a new era of collaborative creative computing," Narayen said in the company's Sept. 15 earnings call.
Adobe is best known for its graphic design and video-editing software programs — including Adobe Photoshop, Adobe Illustrator and Adobe Premiere Pro — that belong to the company's Creative Cloud suite. Figma, with its collaboration capabilities, would be able to help speed up the web-based delivery of Creative Cloud technologies.
San Francisco-based Figma offers a range of cloud-based products that are similar to digital whiteboards. Such tools allow designers and others in related professions to jointly create and share design iterations.
Adobe and Figma expect their deal to be completed in 2023, subject to regulatory clearances, Figma shareholders' approval and other customary closing conditions.
Adobe tapped Allen & Co. LLC as financial adviser and Wachtell Lipton Rosen & Katz as legal adviser for the transaction. Qatalyst Partners LP served as financial adviser for Figma, while the company engaged Fenwick & West LLP as legal counsel.
After the deal closes, Field will continue leading Figma and report to David Wadhwani, president of Adobe's digital media business.
