Earlier this month, Adobe and Figma filed a filing with the SEC that offers a comprehensive history of their conversations and paints a picture of how the two firms came together on a $20 billion agreement last year.
Figma’s co-founder and CEO, Dylan Field, met with Adobe executives many times between 2020 and September to negotiate a deal, a fact that had previously been undisclosed.
The document claims that in early2020, Adobe’s chief product officer and executive vice president for Creative Cloud, Scott Belsky, met with Field to discuss a potential partnership or acquisition, but that Belsky ultimately cut off further discussion and the startup announced a $50 million Series D in April2020, led by Andreessen Horowitz.
The corporation was estimated to be worth $2 billion at the time.
The conversation continued on, though. Again in early2021, Field met with Adobe to explore a potential purchase, this time with CEO Shantanu Narayen. However, Field left the talks without an agreement.
Figma raised $200 million in a Series E round in June, valuing the business at a stunning $10 billion according to statistics from Crunchbase.
That was the state of affairs until April of last year, when Belsky and David Wadhwani, president of Adobe’s Digital Media unit, approached Field again, this time with more urgency.
The sale took months to finalise, with Field first seeking to negotiate a higher price of $23 billion from the firm, which was ultimately refused. According to CNBC, Microsoft—referred to in the document as “Party A”—was also requested to submit a proposal.
It’s possible that Microsoft was reluctant to participate because it had already agreed to purchase Activision Blizzard for $69 billion in January of last year. The report claims that the corporation never submitted a proposal and does not provide a rationale.
It was revealed on September 15, 2022, that the firms had settled on a $20 billion price tag following months of negotiation between lawyers for both sides.
Field discussed the procedure and said that he had engaged in regular talks with Adobe executives beginning as early as 2012, which is consistent with the SEC timeframe.
In order to complete an acquisition, a chronology of events must be created, which adds a unique dimension to the process. And I reflected on our history of communication with Adobe. We first talked to Adobe a few days after announcing Figma in August of 2012,” he explained. Field described the initial encounter as a recruitment effort, and while it ultimately failed, the two parties kept in touch over the years, eventually leading to a $20 billion takeover bid the year before.
His firm is profitable, he said at Disrupt, so the decision to work with Adobe was purely strategic.
When it comes to determining our own fate, we couldn’t be in a better position than we are right now. We have seen a 100% increase in sales over the past year. We have positive free cash flow. As a result, there was no sudden realisation that “oh, goodness, we need to sell this firm.” That has never been a factor in this discussion. Instead, we asked ourselves, “What’s the best chance to realise our vision?” as Field put it at Disrupt.
However, the deal has not yet been approved by regulators and is now under investigation by the U.S. Justice Department. UK authorities are also investigating the proposed acquisition. The European Union is also anticipated to. Adobe anticipates that the transaction will be finalised before the end of the year.
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