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Adobe’s stock price falls as the business decides to acquire the creative platform Figma for $20 billion.

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Also released were financial figures for the third quarter of the fiscal year.

Adobe said Thursday that it would buy Figma for $20 billion in cash and shares. Adobe’s stock fell 17%, the most since 2010.

Figma develops cloud-based design tools for real-time teams since 2012. It rivals Adobe’s XD software.

The most recent financing round for the corporation, which took place in 2021, resulted in a valuation of $10 billion for the enterprise.

Figma, backed by Index Ventures, Greylock Partners, and Kleiner Perkins, is estimated to pull in over $400 million in recurring revenue this year.

Adobe forecasts that by the end of 2022, Figma’s annual recurring revenue will have surpassed $400 million.

Adobe is paying close to 50 times the company’s yearly revenue as cloud software sales multiples decline from historic highs.

Future multiples for leading cloud businesses in the BVP Nasdaq Emerging Cloud Index have dropped to 9 times sales from 25 times revenue in February 2021.

Figma’s infrastructure will benefit from Adobe’s contributions in the areas of graphics, photography, and video.

Photoshop, Illustrator, and Premiere Pro are just few of the tools that Adobe sells to professionals in the industry as part of its suite of image and video editing software.

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