Media editing software vendor Avid explores sale -sources

Avid Technology

24/05/2023 19:01

(Adds share reaction)
    By Milana Vinn
       NEW YORK, May 24 (Reuters) - Avid Technology Inc
 AVID.O , a provider of video and audio editing software and
equipment to filmmakers and recording studios, is exploring a
potential sale, according to people familiar with the matter.
    The Burlington, Massachusetts-based company is working with
Goldman Sachs Group  GS.N  on the sale process and has asked for
binding offers from interested parties, the sources said. 
    Avid's shares jumped 18% on the news to $24.35 in Wednesday
afternoon trading, giving the company a market value of about $1
billion.
    The sources cautioned that no deal is certain and asked not
to be identified because the matter is confidential.
Spokespeople for Avid and Goldman Sachs declined to comment.
    Founded in 1987, Avid provides editing software and hardware
primarily to entertainment industries. Its products, which have
been used in the production of blockbuster movies such as 'Top
Gun: Maverick' and 'Avatar: The Way of Water', include Media
Composer, MediaCentral and AirSpeed. 
    In its first-quarter earnings, Avid's annual recurring
revenue grew 8.1% to $228 million, while its active paid
software subscriptions grew 22% year-on-year.  
    The company missed analysts' expectations, however, and its
shares have dropped, down almost 20% year-to-date. 
    Avid Chief Executive Jeffrey Rosica told analysts on the
company's earnings call that supply chain issues created
"substantial and unexpected gross margin headwinds for audio
hardware," which eroded profitability. 
    An activist hedge fund and Avid's largest shareholder,
Impactive Capital LP, has representation on the company's board
after cutting a deal with the company in 2019. 

 (Reporting by Milana Vinn in New York, Editing by Nick
Zieminski)
 ((milana.vinn@thomsonreuters.com))