Adobe buys Marketo for $4.75 bn to add $321 mn revenue

Adobe Systems announced its deal to buy Marketo for $4.75 billion from private equity firm Vista Equity Partners Management to strengthen digital marketing business.
Adobe at a trade event
The San Mateo, California-based company generated revenue of about $321 million in 2017, according to credit ratings agency Moody’s Investors Service. The cloud business is dominated by Microsoft, Oracle and Salesforce.

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, started in 2006 as an email marketing service, was taken private by Vista for $1.8 billion in 2016, Reuters reported.

The deal is expected to close in the fourth quarter of Adobe’s fiscal 2018 and Marketo chief executive officer Steve Lucas will join the company’s senior leadership team and continue to lead the Marketo team, Adobe said.

After Vista acquired Marketo, it changed its management team, adding Lucas, a former SAP executive, as the CEO in 2016, who helped revive sales growth at the company.

Adobe in May agreed to buy cloud-based e-commerce services provider Magento Commerce from private equity firm Permira for $1.68 billion.

Marketo has nearly 5,000 customers. Marketo’s ecosystem includes over 500 partners and an engaged marketing community with over 65,000 members.

“The acquisition of Marketo widens Adobe’s lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing,” said Brad Rencher, executive vice president and general manager, Digital Experience, Adobe.

JP Morgan advised Adobe, while its legal adviser was Hogan Lovells. Morgan Stanley and Kirkland & Ellis advised Marketo and Vista Equity Partners.