Adobe plans to bulk up on it digital marketing muscle by acquiring Marketo for $4.75 billion.
The deal, announced Thursday, underscores Adobe’s expansion beyond its roots in software like Photoshop photo editing to also become a giant in software that does thing like analyzing how well a company’s online ads perform. It hopes to challenge larger companies like Oracle, Salesforce, and SAP, which have been fighting it out in the field for years.
In May, Adobe said it would buy Magento Commerce, an e-commerce technology company, for $1.68 billion. Adobe folded that acquisition into its marketing technology business.
Adobe’s Marketo acquisition represents a significant win for Marketo’s previous owners, Vista Equity Partners. The private equity firm bought Marketo in 2016 for $1.79 billion and more than doubled its initial investment.
Adobe investors appear indifferent about the deal, with its shares relatively flat in after-hours trading on Thursday at $265.90.
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Under CEO Shantanu Narayen, Adobe converted its old-school Photoshop and related software to a cloud-subscription model, in which customers pay monthly fees to use Adobe’s services instead of paying all at once up front. The move revitalized Adobe’s business, and in 2017 the company joined the Coins2Day 500 list for the first time.
Reuters first reported on the possibility of the Marketo deal last week. It is expected to close in the quarter ending Dec.1.
Adobe said that Marketo CEO Steve Lucas would become a member of Adobe’s senior leadership team and that Marketo would operate under Adobe’s own-marketing technology business.
