Adobe to Buy Frame.io for $1.3 billion in Cash in Video Push

(Bloomberg) — Adobe Inc. is acquiring Frame.io, a startup which makes video collaboration software, for about $1.3 billion in cash, a senior Adobe executive said in an interview.

Frame.io will bring more capabilities to Adobe’s creative cloud, which houses Adobe Photoshop and Illustrator, said Scott Belsky, Adobe’s chief product officer and executive vice president of Creative Cloud. 

Belsky said Adobe wanted to buy New York-based Frame.io after it realized that its customers were using it with Adobe’s suite of products. Adobe considered building its own tools to make it easier for teams to edit video together but ultimately decided to buy Frame.io instead. 

Frame.io serves clients such as broadcasters, media agencies and brands, its founder and chief executive officer Emery Wells said Thursday in an interview. Wells and co-founder John Traver will join Adobe after the close of the deal, which is expected in the fourth quarter of Adobe’s 2021 fiscal year. 

Frame.io was started in 2015, a few years after its founders came up with the concept for the company. It’s backed by Insight Partners and Accel. 

Video Demand

The explosion in video on social media and has stoked demand for products that make it easier to edit video in real-time. That means anyone with a phone — not just media companies or advertisers — is looking to produce polished video. 

Belsky said that Adobe’s video customers, from small businesses, to schools and the largest companies all want to create more video on more platforms, which is why more tools are needed.  

Alan Webber, vice president for customer experience research at research firm IDC, said the old way people would edit video was sitting in a room together and going over changes together.

“In today’s world you really can’t do that because people are spread out all over the place,” Webber said. 

The maker of Photoshop continues to invest heavily in designing new tools for creative professionals and hobbyists. 

Frame.io is Adobe’s largest deal since it bought Workfront for $1.5 billion last year. 

Adobe has ruled the graphics and visual software industry for decades. Its shares, which have gained 27% this year, were trading at $639.34 Thursday in New York.

Boutique bank Qatalyst Partners was Frame.io’s financial adviser on the deal, Wells said.

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