avid technology stg deal

Avid Technology has finalized an agreement to sell to STG. Photo Credit: James Owen

Avid Technology (NASDAQ: AVID) has officially confirmed a “definitive agreement” to go private as part of a $1.4 billion acquisition deal with Symphony Technology Group (STG).

Burlington, Massachusetts-headquartered Avid, the developer of digital audio workstation Pro Tools, only recently provided a formal update on the all-cash sale. Expected to wrap sometime during the fourth quarter (at which point Avid will cease trading on the public market), the proposed deal has received unanimous approval from the selling business’s board.

Behind the $1.4 billion debt-inclusive value attached to the transaction, “an affiliate” of private equity firm STG is specifically set to put up $27.05 per common share – or what’s said to be a more than 32 percent premium from AVID’s value during “the last full trading day prior to media speculation regarding a potential sale.”

Addressing STG’s purchase of his company, Avid president and CEO Jeff Rosica (who’s held executive roles for over a decade) said in part: “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.”

Expanding upon the point in comments of his own, STG managing partner William Chisholm communicated in part: “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.”

Coinciding with the sale’s official announcement was the release of Avid’s financials for Q2 2023, when the business is said to have generated $108.54 million in total revenue (up 11.1 percent YoY).

Within the sum, Avid pointed to $44.44 million in subscription income (up 30.16 percent YoY), $23.47 million from maintenance (down 15.51 percent YoY), and $40.64 million or so from integrated solutions and other sources (up 13.62 percent YoY).

Regarding “backlog” revenue – or that deriving from “orders where the customer has been invoiced in advance of our performance obligations being fulfilled” and from “orders for future product deliveries or services that have not yet been invoiced by us” – Avid attributed $315.2 million to the category as of June 30th.

Lastly, the entity acknowledged a $4.60 million net loss for the three-month stretch, compared to net income of $7.37 million for the second quarter of 2022. Avid’s current per-share stock price, $26.60, reflects a small decrease since 2023’s beginning but a material boost from the 52-week low of $19.78 that it touched until the aforementioned sales rumors spurred a jump in late May.