Avid Acquired for $1.4 Billion by Private Equity Firm STG

August 11th, 2023 by David Weiss

“Avid acquired”: It’s a phrase many have dreaded but also suspected was inevitable. Now the home of Pro Tools has a new home.

Avid (Nasdaq: AVID) announced on Thursday that it has entered into a definitive agreement to be acquired. Making the purchase is an affiliate of STG, a Palo Alto, CA-based private equity firm “focused on fueling innovative software, data, and analytics market leaders in the mid-market.”

An all-cash transaction valuing Avid at approximately $1.4 billion, it will convert Avid back into a privately held company upon completion (Avid has been a public company since 1993). The announcement follows months of media speculation about a potential sale of Avid, resulting in a purchase price of $27.05 for each share of the company’s common stock.

STG”s acquisition of Avid is a major development in the pro audio space.

As the maker of the Pro Tools DAW (digital audio workstation), Media Composer, and multiple other software/hardware solutions for music and sound production, this transaction will be closely watched by the audio production community. R&D, customer support, and other key benchmarks for quality could be affected either positively or negatively by this development. Layoffs at Avid could also ensue, if STG decides to make cost cutting a priority – an approach that private equity firms are well-known for.

The acquisition of Avid is just the latest in a hectic round of M&A activity reverberating through the pro audio sector. As noted in March when SonicScoop covered Audiotonix’ acquisition of Slate Digital, pro audio consolidation is heating up, with big names including Fender, Presonus, iZotope, Native Instruments, Plugin Alliance, Focusrite, and Sonnox all eating, being eaten, or partnering up.

Compare this current audio business climate to when Avid CEO Jeff Rosica had an in-depth interview with SonicScoop, a few months after being named chief executive. In February 2018, Rosica suddenly found himself CEO, overseeing 11 content creation solutions including Pro Tools, Avid VENUE, Sibelius, Media Composer, Avid NEXIS, and MediaCentral. Topics of conversation included what was next for Pro Tools, music creation tools, subscriptions, and cloud collaboration — success or failure in each category would have factored into Avid’s M&A valuation, five years later.

Music producers, audio engineers, post production professionals, and studio owners are paying close attention to how the Avid transaction plays out. Will squeezing every possible dollar out of Avid’s products, people, and customers be STG’s top priority, or does the Pro Tools product family have a chance to improve under new ownership? We’ll have to wait, watch…and listen.

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