Pro Tools has a new owner
Yesterday, Avid Technology, the Massachusetts-based maker of Pro Tools (C++ based digital audio workstation for sound recording, editing, and MIDI mastering) officially closed its 1.4 billion sale to private equity firm STG, based in California.
I use Ableton personally on the creation side, so can’t speak much to Pro Tools, but anecdotally I have heard quite often that Pro Tools has a steeper learning curve for new users. I personally found Ableton to be quite intuitive when I was using it for courses at Scratch DJ Academy in 2018.
That said, I was an Avid shareholder for numerous years, and generally felt the company needed a deep-pocketed partner in order to scale to the next level. Avid itself was an acquirer prior to its sale, having spent over a billion dollars on M&A from 2006—2015 to bolster it product suite, but that meant it also had a lot of debt on its own balance sheet, to the tune of $222m. I will be curious to see if STG can accelerate the innovation cycle at Avid, which is possible as the investment firm can likely extract some level of “shared expertise” from its $10 billion portfolio of other software and analytics companies. Avid is already the de facto standard for the Hollywood industry, having entrenched its market share many years ago, so my best guess is Avid will come back to the public markets in a few years. The current market has been brutal on small cap companies, and Avid was not spared despite putting up pretty good quarterly numbers. In the quarter just reported, its last as public company, Avid registered subscription revenue of $44m, up 30% vs. the prior year; maintenance revenue tallied $68 million, a nice 10% jump from a year earlier.
