Docusign Buyout Heats Up, Adobe Abandons Web-Design Product, and Tech Stocks Recover
Good morning. Below is a weekly dose of what happened in the tech space last week:
DocuSign's $13B Buyout: DocuSign's stock has surged by as much as 65% since November, driven by M&A speculations and interest from private equity buyers. According to an industry report last week, several major Wall Street banks, including JPMorgan Chase & Co. and Bank of America Corp., are in discussions to provide up to $8 billion in financing for a potential $13 billion buyout of DocuSign Inc. This deal, which might involve private equity firms Bain Capital and Hellman & Friedman, could become the year's largest leveraged buyout. Jefferies Financial Group Inc. and Deutsche Bank AG are also considering participating in the financing. While the acquisition discussions are ongoing and subject to change, both traditional banks and direct lenders are exploring ways to support the buyout, necessitating preferred equity to finalize the deal due to the limits on debt financing. All parties involved have declined to comment on the ongoing negotiations.
Adobe Withdraws from Web-Design Battle: Adobe throws in the towel on their UI design ambitions following the failed Figma acquisition, according to a report by Bloomberg. Adobe XD, once seen as a competitor to Figma, will remain in "maintenance mode" with no new features or individual sales. This effectively signals Adobe's surrender in the UI design space, where Figma reigns supreme.
The $20 billion acquisition promised a shortcut to competing with Figma, but regulatory hurdles caused it to crumble. Left with a struggling XD (generating mere $17 million annually) and billions unspent, Adobe has chosen a different path. Instead of building a new rival, they're open to partnerships in the design software space. This marks a strategic shift, acknowledging Figma's dominance and opting for collaboration over direct competition.
Read also: Uber's Drizly Decision, Canva's Share Sale, and the AI Race Heats Up
Tech Stocks Recovered: After a slide in tech sector in the wake of earning announcements last week, major tech stocks have recovered. Meta surged 20% on Friday to to close at an all-time high, as the social media giant focuses on cutting back costs and shoring up billions in profits. Both Nvidia and Amazon delivered a strong quarter and are up 8% and 7.8% respectively. Microsoft bounced back from a post-earning dip, and have been trading sideway since.