Avid stock jumped over 18 per cent on Wednesday (valuing the media giant at $1 billion) after Reuters reported that the company is considering a potential sale.
The company is the largest provider of video and editing software to the media and entertainment industry and has a market value of more than $900 million; according to sources, Goldman Sachs is working with Avid on the sale, Reuters said.
Avid increased its annual recurring revenue by 8 per cent in its first quarter and increased subscriptions by 22 per cent YOY, however it missed analysts’ numbers, sending its stock down 20 per cent since the beginning of the year.
During its quarterly earnings call last week, CFO Kennth Gayron told analysts, “we are confident in the underlying strength of our business. We expect continued strong growth in our subscription business and a positive trajectory given the strength in our bookings the last 2 quarters.”
Nevertheless Avid CEO Jeff Rossica admitted that supply chain issues continued to affect production and that profitability had been hit by “substantial and unexpected gross margin headwinds for audio hardware.”
Based in Burlington, Mass., Avid was launched in the mid-’80s and its Media Composer editing platform was the first and most popular digital nonlinear editing platform in Hollywood. It went public in 1992.
Avid’s biggest shareholders include Impactive Capital LP, BlackRock Inc., Fidelity Investments and Vanguard Group.
Contacted by TVBEurope’s sister title, TV Tech, Avid declined to comment on the report.