Company hopes to target young helmers
HOLLYWOOD — The biggest name in high-end editing systems is jumpstarting its presence on the PC, but investors aren’t too happy about its approach.
Avid Technology on Monday agreed to acquire Pinnacle Systems, a maker of digital media editing systems, for $462 million in cash and stock. Deal gives Avid a stronger presence in the low-end editing market, where Apple is the dominant player.
Wall Streeters seemed worried that Avid won’t be able to compete effectively in the space even with Pinnacle’s assets, as the news sent Avid stock plunging 10%.
With most indie films and even some studio pics being edited on computers with such programs as Apple’s Final Cut, Avid is aiming to expand its presence in the space and make its brand name better known among young helmers.
“By acquiring Pinnacle’s consumer video business, Avid will be able to tap into the next generation of video editors while they are still learning the craft,” Avid topper David Krall said in a statement.
Company will integrate Pinnacle’s professional broadcast editing applications into its own offerings.
Avid will issue 6.2 million shares and pay $71.3 million in cash to complete the deal, representing a 30% premium over Pinnacle’s share price as of Friday. After it closes, Pinnacle’s former shareholders will own 15% of Avid.
Avid shares closed at $56.61 Monday. Pinnacle stock closed up 15% at $5.74.