Avid Technology to be sold to private equity company

Burlington-based Avid Technology Inc., a maker of audio and video editing tools, said Wednesday that it has agreed to be acquired by private equity firm STG for about $1.4 billion, including debt. Avid, founded 36 years ago, sells editing tools that have become ubiquitous in Hollywood and the recording industry. All of the 2022 Academy Award-nominated films for editing and best picture used its technology, as well as the recordings nominated for record of the year at the 2022 Grammys.The deal followed a review of strategic alternatives that included a variety of options, Avid chairman John Wallace said, and was approved unanimously by the company’s board. The transaction is expected to close during the fourth quarter of 2023. In memos to employees and customers, executives said it will be “business as usual” until the deal closes and that Avid plans to continue all the same products and services it does now. As of Dec. 31, Avid had just under 1,500 employees in 36 countries, with its corporate headquarters and a research and development facility in Burlington. Under the terms of the deal, Avid investors will get $27.05 a share in cash, representing a 32 percent premium over the stock price on May 23, before speculation about an acquisition surfaced, the companies said in a statement Wednesday. The stock had plunged earlier in the year after the company reported disappointing results, but buzz over a potential deal helped it climb back. The company also reported earnings on Wednesday, with revenue of $108.5 million in the second quarter, up 11.1 percent from the same period last year, with a net loss of $4.6 million, some of which was tied to restructuring and retirement costs.