Avid to become privately held company

Enters into definitive agreement with STG; will be acquired for $1.4 billion.

Karen Moltenbrey

Avid Technology, a mainstay in the M&E industry, just marked its 36th anniversary in August, but rather than celebrating with a gift of bone china, noted for its strength and durability, per tradition, the company received a greater gift: that of money, or more accurately, financing. If all goes accordingly, Avid will be acquired by private equity firm Symphony Technology Group (STG) for $1.4 billion. As a result, Avid will no longer be a publicly-traded company.

What do we think? Just weeks after announcing its acquisition by Symphony Technology Group (STG), Avid Technology is showing that it is still a relevant player in the industry. Just days ago, the company announced next-gen AI capabilities in its video editing solutions. Available as previews within the latest Media Composer release, the PhraseFind AI and ScriptSync AI solutions tout AI-driven dialog search and sync functions, respectively. With the growing integration of AI in major content creation tools, those companies that do not take advantage of the creativity the technology offers, will find it difficult to stay afloat. No doubt Avid will be trying to prove itself to its new ownership. It will be interesting to see what kind of presence and reception the company will get at the upcoming IBC conference in less than two weeks from now.

Avid logo

And so the industry turns….

In the latter part of the 20th century, numerous companies were sailing the digital production waters, albeit only a few were ruling those seas. Unfortunately, some eventually found themselves being chased by smaller, sleeker firms, or even ones that were larger and more powerful. While others were overtaken, gave up their technology, and began flying another’s flag. Some even disappeared, never to be seen again. And even fewer were thrown a financial lifeline.

Avid Technology, a longtime stronghold in the digital media sector, found itself sailing in these unforgiving waters of late, but Symphony Technology Group (STG) has come to its rescue, as the two companies entered a definitive agreement whereby STG will acquire Avid for a cool $1.4 billion.

Avid, one of the broadcast industry’s biggest plays, can be counted among that latter group.

Founded in the late 1980s by Bill Warner, Avid revolutionized the broadcast industry with its Media Composer digital non-linear editing system. In just a few years, Avid systems were being used across the media and entertainment industry for feature films, television shows, and commercials. Several years after its founding, Avid was strong enough to embark on an acquisition spree—among the purchases were Digidesign (Pro Tools), Softimage (Softimage 3D), Pinnacle Systems (Pinnacle Studio), and many others.

In the 1990s, the name Avid began popping up at the Oscars, and over the years since then, many films created using Avid products were recognized with Oscars and other awards. Avid itself received a Scientific and Technical Oscar for the concept, system design, and engineering of the Avid Film Composer for motion-picture editing at the 71st Academy Awards in 1999. Six years earlier, Avid received a technical Emmy for Outstanding Engineering Development for the Avid Media Composer video editing system by the National Academy of Television Arts & Sciences.

Eventually, Avid would expand into audio post, media storage with shared file systems, media management, effects, editing, and more.

News that Avid was looking into possibly selling the company surfaced in May 2023. In August 2023, Avid announced it had entered into a definitive agreement to be acquired by an affiliate of STG for $1.4 billion. Under the terms of the agreement, Avid stockholders will receive $27.05 in cash for each share of Avid common stock. A private equity partner to market-leading companies in data, software, and analytics, STG is dedicated to transforming and building outstanding technology companies in partnership with world-class management teams.

STG bills itself as a group of former entrepreneurs and business leaders who help companies reach their full potential, with experience in carve outs, public-to-private transactions, and private equity investments. Its website lists a global portfolio of a wide variety of companies.

“Since our founding over 30 years ago, Avid has delivered technology that enables individuals and enterprises who create media for a living to make, manage, and monetize today’s most celebrated video and audio content across the globe.  We are pleased to announce this transaction with STG, who share our conviction and excitement in delivering innovative technology solutions to address our customers’ creative and business needs,” said Jeff Rosica, Avid’s president and chief executive officer. “STG’s expertise in the technology sector and significant financial and strategic resources will help accelerate the achievement of our strategic vision, building on the momentum of our successful transformation achieved over the past several years. This transaction represents the start of an exciting new chapter for Avid, our customers, our partners, and our team members, and is a testament to the importance of Avid and our solutions in powering the media and entertainment industry.”

John P. Wallace, chairman of the Avid board of directors, said, “This transaction is the result of a comprehensive review of strategic alternatives for Avid. Upon closing, this transaction will deliver immediate, significant, and certain value to our stockholders. After carefully evaluating a variety of options, the board determined that this transaction is in the best interests of Avid and its stockholders.” 

William Chisholm, managing partner of STG, acknowledged Avid’s heritage as a “category creator and pioneer” in the media and entertainment software market for many years. “We are excited to partner with Jeff and the management team to build on the company’s history of delivering differentiated and innovative content creation and management software solutions. We look forward to leveraging our experience as software investors to accelerate Avid’s growth trajectory with a deep focus on technological innovation and by delivering enhanced value for Avid’s customers.”

The transaction was unanimously approved by Avid’s board of directors and is expected to close during the fourth quarter of 2023, subject to Avid stockholder approval, regulatory approvals, and other customary closing conditions. The transaction will be financed through a combination of equity and debt financing. Upon completion of the transaction, Avid will become a privately-held company, and its common stock will no longer be traded on Nasdaq.

On August 9, 2023, Avid released its Q2 2023 financial results, which included total revenue of $108.5 million, with an increase in total revenue year over year in the second quarter of 11.1%.