Adobe to acquire Figma in $20bn cash-and-stock deal

Adobe Inc today announced it has entered into a definitive merger agreement to acquire Figma, a leading web-first collaborative design platform, for approximately $20 billion in cash and stock. 

Incorporated in Delaware and headquartered in San Jose, California, Adobe Inc, originally called Adobe Systems Incorporated, offers digital tools for imaging and creative expression with Photoshop while pioneering electronic documents through PDF and creating the digital marketing category with Adobe Experience Cloud.
Founded by Dylan Field and Evan Wallace in 2012, the company pioneered product design on the web. Figma helps teams collaborate visually and make design accessible to all.
It offers interactive mobile and web applications to collaborate through multi-player workflows, sophisticated design systems and a rich, extensible developer ecosystem. 
“Together, Adobe and Figma will reimagine the future of creativity and productivity, accelerate creativity on the web, advance product design and inspire global communities of creators, designers and developers,” Adobe stated in a website release.
“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, chairman and CEO, Adobe. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”
Figma’s web-based, multi-player capabilities will accelerate the delivery of Adobe’s Creative Cloud technologies on the web, making the creative process more productive and accessible to more people, says the release.
“Figma has built a phenomenal product design platform on the web,” said David Wadhwani, president of Adobe’s Digital Media business. “We look forward to partnering with their incredible team and vibrant community to accelerate our joint mission to reimagine the future of creativity and productivity.”
"With Adobe's amazing innovation and expertise, especially in 3D, video, vector, imaging and fonts, we can further reimagine end-to-end product design in the browser, while building new tools and spaces to empower customers to design products faster and more easily,” said Dylan Field, co-founder and CEO, Figma.
Figma expects to have a total addressable market of $16.5 billion by 2025. The company is expected to add approximately $200 million in net new ARR this year, surpassing $400 million in total ARR exiting 2022, with best-in-class net dollar retention of greater than 150 per cent. With gross margins of approximately 90 percent and positive operating cash flows, Figma has built an efficient, high-growth business, the release addes .
As per the agreement, Adobe will acquire Figma for approximately $20 billion, for approximately half in cash and half in stock, subject to customary adjustments. 
Under the deal, approximately 6 million additional restricted stock units will be granted to Figma’s CEO and employees that will vest over four years subsequent to closing. 
Adobe expects the cash consideration to be financed through cash on hand and, if necessary, a term loan. The transaction is expected to close in 2023, subject to the receipt of required regulatory clearances and approvals and the satisfaction of other closing conditions, including the approval of Figma’s stockholders.
Upon the closing of the transaction, Dylan Field, Figma’s co-founder and CEO, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. Until the transaction closes, each company will continue to operate independently.
Allen & Company LLC is serving as financial advisor to Adobe and Wachtell, Lipton, Rosen & Katz is serving as legal advisor in connection with the transaction.