Adobe to acquire Macromedia for $3.4B
Adobe Systems has announced a definitive agreement to acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion.
"By combining the passion and creativity of two leading-edge companies, we will continue driving innovations that are changing the ways people everywhere are experiencing and interacting with information, Adobe said it in a prepared statement.
In the combined company, Chizen will continue as chief executive officer and Shantanu Narayen will remain president and chief operating officer. Stephen Elop, president and chief executive officer of Macromedia, will join Adobe as president of worldwide field operations. Murray Demo will remain executive vice president and chief financial officer. Dr. John Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board of Directors of the combined company and Rob Burgess, chairman of the Macromedia Board of Directors, will join the Adobe Board.
"Both Macromedia and Adobe are passionate about creating and enabling great experiences across a wide range of devices and operating systems," said Stephen Elop, president and chief executive officer of Macromedia. "Our combined teams will be a powerful force for innovation around cutting-edge platforms for delivering content and applications."
According to CBS Marketwatch, Adobe said second-quarter earnings and revenue would be toward the high end of previous guidance due to strong demand for Acrobat. The company had been expected earnings per share between 51 cents and 55 cents and revenue of between $475 million to $495 million.
Separately, Macromedia said it expected net revenue for its fourth fiscal quarter to exceed the $108 to $113 million guidance it provided in January.
Along with the acquisition, Adobe also announced a $1 billion stock repurchase program to start after the Macromedia deal has been completed.
"After a review of the combined companies' financial position, our Board concluded that the repurchase program is consistent with our overall commitment to deliver value to our stockholders," Chizen added.
57 Comments
Ok, I'll say it here then.
"Oh God."
Holy crap.
So if apple acquires Adobe, they'll own almost every form of popular digital media and the programs to make them!
"Macromedia generates about 80% of its revenue from Web site design and development tools, while Adobe only generates about 2% of it revenue from this market, according to IDC research.
Adobe generates about 92% of its revenue from the authoring software market and is fourth in the Web site design market with just under 5%, IDC said."
So basically, Adobes buying Flash and their development tools, and throwing everything else away.
I for one do not like this. I am a huge fan of DreamweverMX and FlashMX and Coldfuision. I am also a huge fan of Adobe products. On a daily basis use both company's products. But I have uneasy feeling that Adobe my discontinue parts of Macromedia products that directly compete with Adobe's product line.
Although Fireworks is not as powerful as Photoshop, it is still a nice little program for super quick images. I only see Adobe keeping Flash intact and the rest of Macromedia's programs being discontinued or incorporated into Adobe lines.
I have worried how far away this day would be. I had a bet with a fellow designer that at some point with Adobe's market share they would some day absorb Macromedia being that they had competing products. And on that point what other company will force Adobe to keep pushing development as hard as it has been.
Time will tell....