Adobe (NASDAQ:ADBE) stock is falling on Thursday after the company revealed plans to purchase web design platform Figma for $20 billion.
According to a press release from the company, Adobe will use a mix of cash and stock to fund the transaction. The company is planning for an even split of cash and stock to acquire Figma.
As for ADBE stock, Adobe will issue 6 million additional restricted units that will vest over a four-year period. These shares will go to the CEO and employees of Figma. The company will use cash on hand for the other part of the deal or may acquire a term loan if necessary.
These two companies expect the deal to close sometime in 2023. When that happens, Figma cofounder and CEO Dylan Field will continue to lead the company. This will have him reporting to David Wadhwani, President of Adobe’s Digital Media division.
Wadhwani said the following about the deal in a news release:
“Figma has built a phenomenal product design platform on the web […] We look forward to partnering with their incredible team and vibrant community to accelerate our joint mission to reimagine the future of creativity and productivity.”
ADBE is seeing heavy trading today with some 6 million shares on the move as of this writing. That’s already above the daily average trading volume of about 2.6 million shares.
ADBE stock is down 13% as of Thursday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.