Adobe Systems Inc. (Nasdaq: ADBE) has reached a deal with Mettle, a Canadian software developer and motion graphics studio, to acquire Skybox virtual reality (VR) technology. The move comes as more entertainment and media businesses are embracing 360-degree video and VR as a new medium.

The Skybox plugin suite was established as an Adobe post-production toolset by Mettle in April 2015. The plugin works within video editing software programs Adobe Premiere Pro and Adobe After Effects. Based in Montreal, Canada, Mettle’s plugins are used by a variety of clients: Disney Imagineering, the New York Times Co. (NYSE: NYT), Facebook Inc. (Nasdaq: FB), Google, YouTube and HBO. Mettle co-founder Chris Bobotis joins Adobe as part of the deal.

“The acquisition of Mettle Skybox technology allows us to deliver a more highly integrated VR editing and effects experience to the film and video community,” states Steven Warner, Adobe’s vice president of digital video and audio. “Editing in 360 VR requires specialized technology, and as such, this is a critical area of investment for Adobe.”

Adobe develops software widely used to produce and edit media, including photos and videos. More recently, Adobe has begun embracing the ever-evolving media industry and shifting its business model away from one-time software purchases. In November 2016, the buyer purchased video advertising network TubeMogul Inc. for nearly $540 million. Adobe’s portfolio of products include: Acrobat, After Effects, Audition, Dreamweaver, InCopy, Lightroom, Illustrator, Premiere Pro, and most notably Photoshop.

360-degree video, virtual reality and other newly-adopted technologies have begun influencing M&A across the media and entertainment sector. Television networks and media hubs, such as Viceland, Hulu and the New York Times, have grown a unique audience and brand with their embracement of virtual reality content. Other media deals include: Sinclair Broadcast Group Inc.’s (Nasdaq: SBGI) purchase of Tribune Media Co. (NYSE: TRCO) for about $3.9 billion; media billionaire Rupert Murdoch’s, through his company 21st Century Fox Inc., deal to acquire European pay-TV provider Sky Plc for nearly $14.6 billion; American Media Inc.’s agreement to buy Us Weekly from Wenner Media LLC; Moore Frères & Company’s completed purchase of Opera TV for its over-the-top (OTT) video streaming software; and Wasserman’s investment in Cycle Media.

Mettle

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Kamaron Leach

Kamaron Leach

Kamaron Leach joined SourceMedia in 2016, serving as Reporter of Mergers & Acquisitions. Kamaron writes the Finance Finesse column about investment banking and lending, and also covers the media and entertainment sector.