What Adobe’s Abandoned $20 Billion Deal to Acquire Figma Means
Adobe’s decision to abandon its $20 billion bid to acquire collaborative web design provider Figma could have widescale implications for both parties as well as for startups in general, industry observers believe. Fifteen months after the cash-and-stock merger proposal was first announced, both companies have agreed to terminate what would have been among the biggest buyouts of a startup, saying in a statement they could not see “a clear path” forward for approval to come through from antitrust regulatory authorities.
For Adobe, the scuttled deal means going back to the drawing board for its design collaboration strategy. In a story by Tech Crunch, Adobe’s General Counsel Dana Rao said Adobe had all but dismantled the team behind Adobe XD, the product it had pitted against the Figma platform but was unable surmount. Adobe’s current position is not one in which the company could have envisioned itself at the time the deal was announced. The failed deal also underscores a paradigm shift in content creation with the onset of generative AI: that value lies not in the content itself, but in the ability to collaborate on content, which will require Adobe to restructure XD if it were to refocus the product, according to Tech Crunch.
On the plus side, Adobe will now have plenty of available cash at its disposal to pour into generative AI initiatives, much like what it has done in releasing generative AI photo tools such as Adobe Firefly. The cash could also be invested in various increasingly popular AI-relevant spheres, especially since the world today is vastly different from the time the merger was first announced, in September 2022, prior to technologies like ChatGPT.
Related Article: Adobe Revenue in Q4 Hits $5 Billion, Up 12% YoY, As Growth Continues
For Figma, which proved to be Adobe’s biggest potential threat in two decades, the San Francisco-based startup is walking away with a $1 billion breakup fee as part of the termination agreement. Figma has also expanded its team from 800 to 1,300 in the past year, is expected to increase its annual recurring revenue this year by 40% to more than $600 million, and has added new capabilities to its popular FigJam tool, becoming a stronger company in the process.
For startups, the failed deal highlights the much tougher scrutiny that M&As may need to withstand. In the case of Adobe and Figma, the companies were battling multiple regulatory challenges issuing from the European Commission, the executive body of the EU, and the UK’s Competition and Markets Authority (CMA), with the US Department of Justice also on the verge of weighing in on whether to investigate. In the aftermath of the failed deal, the effects will not only be felt by Big Tech, which will be more cautious in brokering such deals, but also by smaller technology companies, which may not be able to command the kind of favorable exit premium that Figma did, reports Reuters, citing comments by Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
How all this plays out in subsequent M&A deals is a question best deferred to proverbial wisdom for adjudication: only time will tell.
Alteryx to be Acquired by Clearlake and Insight Partners for $4.4 Billion
Alteryx, the Irvine, California-based maker of advanced analytics automation solutions for data science, announced that it has entered into a definitive agreement to be acquired by global private equity firms Clearlake Capital Group and Insight Partners in a transaction valued at $4.4 billion, including debt.
The transaction represents a 59% premium to the unaffected closing stock price on September 5, 2023, the last full trading day prior to media reports regarding a possible sale. Under the terms of the agreement, Alteryx stockholders will receive $48.25 per share in cash for each share of Alteryx Class A or Class B common stock that they own.
Mark Anderson, CEO at Alteryx, says the deal will provide increased working capital and industry expertise to Alteryx, along with the flexibility to work as a private company. “Together, we will make investments that matter most to our customers and accelerate our mission of harnessing the power of analytics to enable customers all over the world to transform data into a breakthrough,” Anderson noted.
Behdad Eghbali, Clearlake co-founder and managing partner, along with Prashant Mehrotra, partner at Clearlake, say they appreciate Alteryx technology enabling users to transform data into insights. “As organizations become increasingly data driven and focused on utilizing artificial intelligence (AI) technology, we see a tremendous growth opportunity for Alteryx’s new AI products and feature-rich cloud solutions and to further its reputation as an innovator in the data preparation and data analytics markets,” they note in joint remarks.
Deven Parekh and Ryan Hinkle, each a managing director at Insight Partners, add: “Alteryx’s success stands as a testament to their visionary founder’s exceptional ability in shaping the future of software and technology—a journey Insight takes great pride in being a part of.“
The transaction, which was approved and recommended by an independent Special Committee of the Alteryx Board of Directors and then approved by the Board, is expected to close in the first half of 2024, subject to customary closing conditions and approvals, including approval by Alteryx stockholders and the receipt of required regulatory approvals. Upon completion of the transaction, Alteryx common stock will be delisted from all public stock exchanges.
Founded in 1997, Alteryx is the proponent of a low-code/no-code platform for users to conduct data analytics and arrive at decisions driven by insights. The company serves various industries, including consumer packaged goods (CPG) and retail, financial services, healthcare, higher education, manufacturing, oil and gas, and the public sector.
Clearlake Capital Group is a private equity group that focuses on the technology, industrial, and consumer sectors. Insight Partners is a global venture capital and private equity firm that invests in high-growth technology, software, and internet businesses.
UGC Provider Bazaarvoice to Acquire E-Commerce Context Solution Firm Granify
Bazaarvoice, the Austin, Texas-based provider of a user-generated content (UGC) and social commerce platform, is acquiring Granify, the e-commerce contextualization solution firm with offices in Edmonton, Alberta, in Canada, and in Austin, Texas.
Financial details of the transaction are not available, but the acquisition will enable Bazaarvoice to power e-commerce engines and deliver a more seamless shopper experience. For its part, the Granify software will overcome barriers to creating tailored on-site experiences, combining in-session shopper behavioral data with contextual signals to identify key moments in a shopper’s journey to drive better conversion.
Keith Nealon, CEO at Bazaarvoice, says the acquisition will allow brand and retail customers to differentiate themselves from the competition by delivering customized and engaging experiences to consumers. “At Bazaarvoice, we’ve focused on connecting shoppers to the information they truly want and need at the right time. This acquisition allows them to do just that, within one single full-funnel content solution.”
Jeff Lawrence, CEO at Granify, concurs. “By joining Bazaarvoice, we are able to couple our unique capabilities with their full-funnel content solutions to ensure brands and retailers are providing exceptional shopping experiences for consumers that help them to convert.”
Author Information
Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
