Adobe Gets His Business, Cashing In Marketo For $ 4.75 Billion – TechCrunch

A week ago, rumors circulated that Adobe would buy Marketo, and here it is announced today that it would acquire the marketing automation company for $ 4.75 billion. dollars.

It was a very good return for Vista Equity Partners, who bought Marketo in May 2016 for $ 1.8 billion in cash. They kept it for two years and made a huge profit of $ 2.95 billion.

Last week, we published an article in which we believe that such an agreement would be wise for Adobe, which just acquired Magento in May for $ 1.6 billion. The agreement gives Adobe a strong position in enterprise marketing because it competes with Salesforce, Microsoft, Oracle and SAP. Together with Magento, it gives them marketing and e-commerce.

"The acquisition of Marketo Expands Adobe's leadership in B2C and B2B customer experience and places Adobe Experience Cloud at the heart of all marketing, "said Brad Rencher, Executive Vice President and General Manager of Digital Experience at Adobe.

According to Ray Wang, principal analyst and founder of Constellation Research, Adobe can compete more with Salesforce in this area. "If Adobe takes a position on Marketo, that means they're serious about B2B and they're fighting the battle between Microsoft-Adobe and Salesforce-Google," he told TechCrunch. It refers to the deepening of relations between these companies.

Brent Leary, senior analyst and founder of CRM Essentials, agrees, considering that Microsoft is also getting positive results from this transaction. "It's not just a big problem for Adobe, but another potential winner with this one is Microsoft because of the growing partnership between the two companies," he said.

Adobe released its results last Thursday, announcing $ 2.29 billion for the third quarter, an increase of 24% over the previous year and a new record for the company. While Adobe is on track to become a $ 10 billion company, the majority of its revenue continues to come from Creative Cloud, which includes Photoshop, InDesign, and Illustrator, among other success factors for Adobe software.

But for a long time, the company wanted to be much more than a creative software company. He wanted a slice of the corporate marketing pie. Until now, this part of the company, which includes marketing and analytics software, is far behind Creative Cloud's business. In its latest report, Digital Experience revenue, where Adobe accounts for these revenues, accounted for $ 614 million in total revenue. Although it continues to grow, up 21% year-on-year, the potential is much greater here.

Adobe had less than $ 5 billion in cash after the Mageno acquisition, but its stock price has risen dramatically in the past year, from $ 149.96 last year to $ 266.05 at the publication.

The acquisition comes as there is a lot of maneuvering in this space and the different giant companies compete for market share. Today's acquisition gives Adobe a huge boost and not only provides them with a missing piece, but 5,000 Marketo's base of 5,000 customers and the opportunity to increase revenue in this part of their catalog. allowing them to be more competitive.

The transaction is expected to close in the fourth quarter of Adobe. Steve Lucas, CEO of Marketo, will join the Adobe management team and report to Rencher.

It should also be noted that the announcement comes a few days before Dreamforce, Salesforce's huge customer conference takes place in San Francisco, and Microsoft will hold its Ignite conference in Orlando. Although the timing may be a coincidence, it ends up robbing some of the thunder of their competitors.