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2
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· Posted on
February 21, 2024

Adobe is acquiring Figma for $20 billion USD. Moral of the story: if you can't beat them, acquire them

Adobe has agreed to acquire rival Figma for $20 billion USD.

What's the key learning?

  • While Adobe is a behemoth with a market cap of $140 million USD, it has recently been challenged by other design platforms, like Canva and Figma.
  • Adobe has agreed to acquire Figma, for $20 billion USD in a combo of half cash, half shares.

👉 Background: Adobe is an American multinational software company that started life in 1982. It plays in many spaces, like graphic design, illustration and animation but it is best known for the one and only Photoshop.

👉 What happened: While Adobe is a behemoth with a market cap of $140 million USD, it has recently been challenged by other design platforms, like Canva and Figma (which has more than 4 million users).

👉 What else: Now, Adobe has agreed to acquire Figma, for $20 billion USD in a combo of half cash, half shares. And in some major irony, Figma will now be owned by the company that it was born to rival.

What's the key learning?

💡 Adobe and Figma may be celebrating today... but not all large acquisitions go to plan. In fact, 60% of M&A deals are considered failures, according to Aoris Investment Management.

💡An M&A deal may be considered a failure for a range of reasons:

  • the value of the company has been written down after acquisition
  • a key product as part of the acquisition was decommissioned
  • the acquirer was left with significant debt after the acquisition

💡 And if the feedback from the Figma community is anything to go by, this deal may have some challenges ahead.

‍

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