Adobe Systems acquires Marketo Inc for $4.75 billion

Given the similarities of Marketo’s business with Adobe’s cloud-based business, the cost synergies in the deal hit a sweet spot.

Adobe Systems has agreed to acquire Marketo Inc from Vista Equity Partners Management, a private equity firm, for $4.75 billion.

The acquisition will boost its cloud-based digital marketing business.

Adobe is sharpening its focus on the fiercely competitive cloud business market dominated by Salesforce, Microsoft Corp, and Oracle Corp.

According to a statement by both companies, Marketo’s business-to-business marketing applications will complement Adobe’s digital marketing business, which provides cloud-based tools to help create, manage and analyze advertising and marketing campaigns.

Marketo, which started in 2006 as an email marketing service, was taken private by Vista for $1.8 billion ten years down the line.

According to Moody’s Investors Service Inc, the San Mateo, California-based company had revenues of around $321 million in 2017.

The deal is expected to close in the fourth quarter of Adobe’s fiscal 2018. After the acquisition Steve Lucas, Marketo’s Chief Executive Officer is likely to join Adobe in a senior leadership position and will continue to lead the Marketo team, said Adobe.

Lately, Adobe has been on a shopping spree: in May it agreed to acquire cloud-based e-commerce services provider Magento Commerce for $1.68 billion from private equity firm Permira.

While Hogan Lovells acted as Adobe’s legal adviser, JP Morgan was its financial adviser. Morgan Stanley and Kirkland & Ellis advised Marketo and Vista Equity Partners.

With the news reaching the market, Adobe’s shares were up marginally in extended trading.


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