SWALLOW: Adobe to acquire rival software design firm Figma for $20 billion in cash and stock

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Posted on 09/15/2022


Adobe Inc. has announced that it will acquire design software company Figma, Inc. in a deal worth approximately US$20 billion in cash and stock. Upon the official announcement of the deal, Adobe shares fell 17%, their biggest plunge since 2010. Among Adobe’s major shareholders, 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, approximately half in cash and half in stock, subject to customary adjustments. Approximately 6 million additional restricted stock units will be granted to the CEO and employees of Figma, which will vest over four years after closing. Adobe expects the cash consideration to be funded by cash on hand and, if necessary, a term loan. The transaction is expected to close in 2023, subject to receipt of required regulatory clearances and approvals and satisfaction of other closing conditions, including Figma shareholder approval. Upon closing of the transaction, Dylan Field, co-founder and CEO of Figma, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. Until the closing of the transaction, each company will continue to operate independently.

Advisors
Allen & Company LLC is acting as financial advisor to Adobe and Wachtell, Lipton, Rosen & Katz is acting as legal advisor in connection with the transaction.

Figma was founded in 2012 and creates cloud-based design software that allows teams to collaborate in real time. It is in direct competition with Adobe’s XD program.

Figma was valued at $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.

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