M&A: All about the Adobe Figma deal

carlo

November 3, 2022
3 min read

Buyer

Adobe

Adobe is a digital multimedia giant that spans Digital Media, Digital Experience, and Publishing and Advertising. Its flagship product is the creative cloud that encompasses software like Photoshop, Lightroom, Aftereffects and others, enabling cloud-based usage such as google suite.

Target

Figma

Figma is a design platform for collaborative product teams. Born on the web, Figma helps teams brainstorm, design, and develop better outcomes— from design, branding, and palette to many more aspects of creative marketing.

Total Deal Value

Total Deal value is 20Bn

When?

The deal for Adobe to acquire Figma was announced on the 15th of September 2022 and made definitive on the same date.

Price Effect

Adobe Stock price change when deal announced: -26%

M&A Direction

Horizontal & Vertical, Same industry (graphic design software) with possibility of integration of Adobe's distribution network.

Deal Details and Other Payments 💵

Adobe Inc. will pay $22.4795 per share in cash, exchanging 0.045263 shares for each outstanding share of Figma Inc.
Adobe Inc. is also in charge of repaying the $9.737 billion debt of Figma Inc.
Adobe Inc. will make non-contingent future payments of $25.914 million.
The deal is still subject to reconsideration and term changes but is definitive.

Estimated Synergies: Positive 🖇

Revenue Enhancements: Reduced competition in the Graphic Design market, shared marketing of Figma based on strong awareness of adobe, along with inclusion in packages such as creative cloud
Costs reduction: Figma and Adobe can share the same CDN (Content Distribution Network) lowering maintenance, setup and configuration costs. Access to shared cloud technology as well.
Capital requirements: Can share technical human capital and management is already used to industry nature.

Public Sentiment: Mostly Negative 😒

Adobe’s move to buy Figma, at an overpriced rate, is received as a desperate move to hold a monopolistic position in the graphic design software market.
The public perception of this move is that Adobe was possibly fearful of Figma’s competition, a sign that Adobe was struggling to compete.
Furthermore, there is a clash in company cultures. Whilst Figma was based around ease of use and user-based experience; Adobe has serious public image issues due to being associated with external perceptions such as bloated products and nasty license-checking DRM.
This creates resentment that Adobe will “ruin” what made Figma so positively recieved and furtherly negatively impact its already severed brand image.