Avid Technology to be acquired by STG for $1.4 billion

After months of anticipation and speculations about the potential acquisition of Avid Technology, the news we’ve been waiting for has finally arrived.

Avid Technology, the renowned creator behind Avid Media Composer editors and Pro Tools used by a million creators and thousands of media enterprises, announced on Wednesday it has agreed to be acquired by private equity firm STG for about $1.4 billion, including debt.

As part of the acquisition agreement, Avid investors will receive a cash payout of $27.05 for each share of Avid common stock they hold. This cash price carries a premium of 32.1% over the company’s closing share price on May 23, 2023. This date is noteworthy as it preceded the media rumors and discussions about the potential sale of the company.

“After carefully evaluating a variety of options, the Board determined that this transaction is in the best interests of Avid and its stockholders,” Avid Chairman John Wallace said.

The transaction is expected to close in the fourth quarter of this year. Avid also added that the debt financing for the deal was provided by  Sixth Street Partners and Silver Point, Reuters reported.

Founded in 1987 by Bill Warner and based in Burlington, Massachusetts, Avid has played a significant role in shaping the way media professionals edit and manage audio and video content. Among its impressive array of products, notable mentions go to Media Composer, MediaCentral, and AirSpeed. These tools have played integral roles in the creation of blockbuster films like “Top Gun: Maverick” and “Avatar: The Way of Water.”

An activist hedge fund and Avid’s largest shareholder, Impactive Capital LP, has representation on the Burlington, Massachusetts-based company’s board after cutting a deal with the company in 2019.

Having engaged in a deal with the company back in 2019, Impactive Capital LP, an activist hedge fund and Avid’s largest shareholder, has secured representation on the board of the company. This maneuver has added another layer of influence and presence to the Burlington, Massachusetts-based Avid.

On the other side of this acquisition is STG, headquartered in Palo Alto, California. This mid-market private equity firm specializes in technology investments. Noteworthy is their recent successful endeavor involving Momentive Global Inc, the parent company of SurveyMonkey, in a sizable $1.5 billion privatization deal earlier this year.

STG boasts an impressive portfolio, currently managing assets worth around $10 billion. Their extensive experience shines through their involvement with over 50 technology industry enterprises, cementing their position as a prominent player in this arena.