Shares of Avid Technology Inc. (NASDAQ:AVID) were up 12.1% as of 11:30 a.m. EST on Tuesday after the media platform company expanded its its presence in China through an alliance with longtime channel partner Beijing Jetsen Technology.
More specifically, Avid announced a new "go-to-market" commercial partnership under which Jetsen will be the exclusive distributor of Avid's media tools and workflow solutions in Greater China. Avid also receives minimum annual performance guarantees for Greater China through the distributor agreement, including roughly 15% annual growth in both revenue and cash representing a total value of $75 million for the contract over its first three years. Jetsen will also assume responsibility for Avid's operations in the region, with all existing Avid resellers in China purchasing directly from Jetsen going forward.
"As we start to enter the next phase of Avid's strategy," added Avid CEO Louis Hernandez Jr., "our agreement with Jetsen will give us much stronger go-to-market capabilities to expand our market position, drive consistent business growth and have the needed partner to accelerate our cloud-enabled Avid Everywhere strategy across greater China."
For perspective, Avid's entire market capitalization as of this writing stands just above $230 million, so the relative value of this $75 million deal is indeed significant. With shares still down around 20% over the past year, it's no surprise to see investors bidding up Avid Technology stock today.