Adobe in talks to buy marketing software firm Marketo

Adobe Systems, a provider of image-editing software Photoshop, is in talks to buy Marketo, a cloud-based marketing software company, Reuters reported.
Adobe at a trade event
The deal would boost Adobe’s cloud-based software offerings as it takes on larger firms such as Microsoft and Oracle. Marketo offers business-to-business marketing applications that would compliment Adobe’s marketing business.

Private equity firm Vista Equity Partners Management took Marketo private two years ago for $1.8 billion.

Adobe has a market capitalization of $130 billion. Adobe has topped analysts’ profit and revenue estimates for the past eight quarters, driven by strength in its digital media business, which houses its flagship product Creative Cloud.

The San Jose, California-based Adobe has been exploring possible acquisitions. Adobe in May agreed to buy e-commerce services provider Magento Commerce from private equity firm Permira for $1.68 billion to bolster its Experience Cloud business.

San Mateo, California-based Marketo generated revenue of approximately $321 million, according to credit ratings agency Moody’s Investors Service.

Adobe reported revenue of $2.20 billion (+24 percent) in its second quarter of fiscal year 2018. Digital Media segment revenue was $1.55 billion, with Creative revenue growing to $1.30 billion and Document Cloud achieving revenue of $243 million. Digital Experience segment revenue was $586 million.