Avid to be Acquired for $1.4 Billion

[Geoff Grace]

It looks like Avid found a buyer:

Avid Technology Enters into Definitive Agreement to Be Acquired by an Affiliate of STG for $1.4 Billion

Hoping for the best...

Best,

Geoff

[Guy Rowland]

Lots of early speculation out there that confidently predicts Avid will now immediately sell off both Media Composer and Pro Tools, leaving I'm not sure what.

I neither understand companies or money.

[Mikeybabes]

"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."

I'm so pleased. I was so worried about the stockholders.

Seriously though, going from previous lived experiences, I'm confident that this isn't going to be good for end users, though I desperately hope to be proved wrong.......

[wst3]

Mr. Wallace's statement rankled more than a few I imagine.

It is true that he is accountable to the stock holders, but honestly, when that becomes the priority I think the game is over anyway.

I can't believe no one coached him about what to say, or worse, his speech writer is tone deaf.

[lofi]

Fingers crossed we’ll get the midi-plugins before they close shop.
/Anders

[tack]

I've not seen a single case of any company acquired by a private equity firm (which STG is) actually benefiting any consumer. Their singular goal upon acquisition becomes value extraction.

Features get squeezed, monetized as much as customers can bear, morale within the product engineering team rapidly tanks, product owners/managers are sacked or constructively dismissed (because product vision isn't actually important anymore), the top talent quits, and the remaining people who stick around are usually unqualified to execute anything with quality (because if they could get a less soul-sucking job somewhere else they would).

I predict Avid is going to be completely sucked dry in 5 years.

[wst3]

My experience mirrors Jason's description - I do not think this bodes well for Avid or their customers. I'd dearly love to be proven wrong!!!

[Guy Rowland]

Production Expert’’s take here - https://www.production-expert.com/produ ... ale-to-stg - they share everyone’s suspicions. However, they conclude with some very cautious optimism. Having linked a number of learned and excoriating articles on the calamity of private investment companies:

Reading those documents can feel somewhat depressing. However, there are other companies in this sector that have used the private equity funding model to great success, for example, Audiotonix, owners of brands like Digico, SSL, and Slate Digital. IK Multimedia is owned by Amira, a private equity firm.

One can’t simply write off all private equity purchases, some end badly, and others don’t.

As we’ve already said, no one at Avid is willing or able to go on record about this sale, but from conversations we’ve had with those close to them, we believe there is a lot of optimism about this deal.

[GR Baumann]

I've not seen a single case of any company acquired by a private equity firm (which STG is) actually benefiting any consumer.

JPW: [...] immediate, significant and certain value to our stockholders.[...]

Yeah Jason, you're right.

[Guy Rowland]

I mean - I share much of the cynicism and I think a bad consumer outcome is quite likely, but I think that article raises good specific examples. SSL and IK Multimedia seem perfectly good companies to me, and they are both owned by a private equity firm.

As to the stockholders comment - yes I bristled at first too. But - remembering I understand little-to-nothing about finance - isn't that the first thing they have to say regardless of anything else because the stockholders have to vote for this and then they are gone? It's not the same as having to pay out dividends ongoing and that shaping the company.

[Lawrence]

I’m glad I don’t have a dog in this fight. The studio I worked at for 20 years had ProTools 3 and a complicated method of syncing it. I’ve been far too involved in wrangling Cubase since 1997 to bother with PT, but with the work I do I haven’t had to. I feel for those who have had to worry about Digidesign’s and Avid’s business decisions.