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Avid sells consumer video editing line to Corel Corporation

As covered by sister publication PSNEurope, Avid has announced it will sell off its consumer video editing and audio product lines, in a deal worth around $17 million.

As covered by sister publication PSNEurope, Pro Tools developer Avid has announced it will sell off its consumer video editing and audio product lines, in a deal worth around $17 million. The company’s consumer video editing line is being sold to Corel Corporation, a Canadian consumer software company. Products involved include Avid Studio, Pinnacle Studio, and the Avid Studio App for the Apple iPad. In separate news, Jack O’Donnell’s InMusic Group, the parent company of production and DJ brands, Akai Professional, Alesis and Numark, has bought the M-Audio of keyboards, controllers, interfaces, speakers and digital DJ equipment, and the AIR Software virtual instrument/plug-in developer, from Avid. Staffing levels at Avid will be reduced by around 365 (projected), says the company. Since October 2008, Avid has cut its staff by 800 jobs. Kirk Arnold, executive vice president and COO, has stepped down and will not be replaced. The company’s cash balance on March 31, 2012 was $49.7 million. The proceeds from the sale of these product lines should offset most of the restructuring charges paid in 2012. In a conference call at 5pm GMT, Avid also revealed it aims to save $64m by cutting staff, $16m by “darkening facilities”. In a statement earlier today, Avid said: “The divested product lines contributed approximately $91 million of Avid’s 2011 revenue of $677 million. As part of the transactions, certain employees of Avid will transfer to each acquiring company. Avid estimates that the proceeds from these transactions will be approximately $17 million, subject to closing inventory adjustment, with a portion held in escrow. Both transactions are expected to close today, July 2, 2012. “Avid also plans to reduce the number of its employees as it streamlines operations, with approximately 20% of its permanent employee base impacted by the divestitures and headcount reduction plans. The company currently expects to incur a restructuring charge of approximately $19 to $23 million related to these actions and other associated measures. “The changes we are announcing today make Avid a more focused and agile company,” said Gary Greenfield, CEO of Avid (pictured). “By streamlining and simplifying operations, we expect to deliver improved financial performance and partner more closely with our enterprise and professional customers. Our objective remains to provide these customers with the innovative solutions that allow them to create the most listened to, most watched and most loved media in the world. I’m excited about our future prospects.” Avid says it will continue to develop and sell its industry-leading Pro Tools line of software and hardware, as well as associated I/O devices including Mbox and Fast Track. The share price is currently around $7.50, compared with last year’s three-year peak of $20.