Avid® (Nasdaq: AVID) today announced that it has entered into a ‘go-to-market’ commercial partnership for the Greater China market with Beijing Jetsen Technology Co. Ltd, a proven and long-time channel partner of Avid in China.
The alliance will expand Avid’s presence in the strategically important Greater China market, and offer the company a strong platform to accelerate growth of its cloud-enabled Avid Everywhere platform and solution suites. The go-to-market alliance will also offer customers and channel partners in the region a stronger local presence for Avid, which can better serve them and support their needs.
According to Frost & Sullivan, the broadcast and post-production market segments in Greater China represent a US$1.5 billion market opportunity that is anticipated to grow 15% per year through 2020. China is also the second largest film box office in the world and is starting to take a more significant role in the international market for feature films. Avid’s go-to-market partnership with Jetsen will help it to better navigate this large and growing but complex market, and create an enhanced platform for the company’s market penetration and growth across the Greater China region.
The agreement makes Jetsen the exclusive (master) distributor in Greater China of Avid’s comprehensive tools and workflow solutions for creating, distributing and optimizing media. As part of the exclusive distributor agreement, Avid receives minimum annual performance guarantees for Greater China, delivering double-digit (~15%) annual growth for Greater China in both revenues and cash, and represents a total contract value of greater than US$75 million for the initial three years. Under the agreement, Jetsen will take over responsibility for Avid’s operations in the Greater China region. All existing reseller agreements with current channel partners of Avid in Greater China will also be transferred to Jetsen, and these partners will be able to continue to represent the Avid portfolio as they do today, but will purchase directly from Jetsen going forward.
Jetsen will distribute all Avid products and solutions in Greater China, including mainland China, Hong Kong, Macau and Taiwan, continuing to work closely and directly with Avid’s existing reseller network in the region. Supporting Avid’s strategies for the Greater China market, the agreement with Jetsen enables Avid to deliver on its commitment to providing its client community the most flexible deployment models, licensing options and commercial structures with future cloud and enterprise offerings for the region, as well as more localized and tailored solutions. With Jetsen taking responsibility for Avid’s operations in Greater China, combined with their own very strong technical support and customer care capabilities, customers and partners in the region can expect an improved support mode to best serve their business and operational needs.
As part of the arrangement, Jetsen will also invest $18.1 million in Avid in a private placement transaction in return for a minority stake in the company of between 5.0% and 9.9%, which is dependent on the company’s share price performance leading up to the closing of the investment. The investment by Jetsen in Avid is subject to customary closing conditions, including regulatory approvals.
Jones Day has Avid Technology Inc. on the deal with a team led by
Involved fees earner: Jessie Tang – Jones Day;
Law Firms: Jones Day;
Clients: Avid Technology Inc.;