Wix Acquires DeviantArt, Pairing Wix Capabilities with Global Creative Community
Wix acquires online creative community DeviantArt
Wix.com Ltd.
Feb 23, 2017, 08:00 ET
“DeviantArt has built an impressive online community that is incredibly loyal, highly engaged and regularly produces stunning art and design,” said Avishai Abrahami, co-founder and CEO of Wix. “The DeviantArt community is talented and robust and hungry for additional product expertise.” Acquisition Boosts Product, Brand and Traffic Opportunities DeviantArt will Retain Its Strong Brand and Continue to Foster Its Community Wix.com Ltd. (Nasdaq: WIX) has announced that it has acquired DeviantArt, one of the world's largest online communities dedicated to artists, art enthusiasts and designers. The acquisition represents inherent opportunities in key growth areas for Wix including product development, brand recognition and increased traffic potential. Wix will provide DeviantArt users easy access to powerful tools specifically designed to help emerging artists create and showcase their creativity online and build their brands. At the same time, Wix creatives and designers will have access to DeviantArt's thriving community of tens of millions of visual artists. Wix and DeviantArt share a vision to provide designers and artists of all types a platform on which they can create, manage and showcase their work online, grow their audience and build their own global brands. Wix will provide technology and marketing expertise to the DeviantArt universe enabling its users to further their reach and increase engagement, both online and on mobile. DeviantArt's focus on developing and fostering online collaboration and communities will provide Wix users a platform to engage with creative designers and artists across multiple mediums. Together the companies will strive to create an innovative gallery for artists globally, mixing world class creative with unmatched opportunities for design, display and distribution. "We founded DeviantArt to enable the creative spirit in everyone, creating a platform dedicated to the vision and talent of the community which could be shared with the world," said Angelo Sotira, Co-founder and CEO of DeviantArt. "This combined effort with Wix creates new opportunities for innovation never before seen on the Internet and an amazing super-charged offering to our community members. We look forward to being part of the Wix team, and we are humbled by the respect and love they have shown to our community." As part of this acquisition, Angelo Sotira, Co-founder and CEO of DeviantArt, will join the Wix management team. DeviantArt will continue to foster its community from its headquarters in Los Angeles, and all of its employees will join Wix. About the Acquisition Through this transaction, Wix has acquired 100 percent of DeviantArt's capital stock in exchange for approximately $36 million in cash, including approximately $3 million of assumed liabilities. As of December 31, 2016, Wix had $172 million in cash on its balance sheet. The transaction closed on February 22, 2017, and will be recorded in Wix's first quarter 2017 financial statements. Financial Outlook Upon this acquisition, Wix intends to invest in growing and enhancing the DeviantArt community and platform, including its user experience on desktop and mobile products and the DeviantArt mobile app. Wix also intends to invest in the integration of the platforms in order to create incremental value for its users. These investments will include the addition of headcount in R&D and sales and marketing throughout the year. DeviantArt's existing business will continue to operate and gain the benefit of this additional investment from Wix, adding more value over time. As a result of this transaction, Wix is making the following adjustments to its previous outlook for the full year 2017:
- Increasing its revenue outlook by approximately $8 million to $417 - $419 million
- Increasing its collections outlook by approximately $9 million to $461 - $467 million
- Investments in the platform are expected to decrease FY17 free cash flow outlook by approximately $8 million to $63 - $64 million. This estimate reflects further investment in R&D and marketing, integration costs, employee retention bonus payments and other transaction related expenses