Adobe Buys Marketing-Automation Firm Marketo for $4.75 Billion

Irving Hamilton
September 21, 2018

Adobe has been selling software to consumer marketing teams for decades, and it will start butting heads with enterprise marketing software vendors following the close of its $4.75 billion acquisition of Marketo, announced Thursday.

An Adobe Systems Inc software box is seen in Los Angeles, California, U.S., March 13, 2017. The company, which recently hired Seattle's Mika Yamamoto as its president, was acquired by a private equity firm in 2016 for $1.8 billion before turning into what CNBC believes is the largest acquisition in Adobe's 36-year history.

Adobe is known for products like Photoshop and Adobe Reader, but the company's Experience Cloud, which houses its marketing technology and data and analytics products, is growing at a fast clip, the company said.

On a call with analysts, Brad Rencher, EVP and GM of Adobe's Digital Experience business said the deal will help Adobe acquire more customers through targeted, account-based advertising, and improve campaign creation with access to an Marketo's repository of content assets.

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The San Mateo, California-based company generated revenue of about $321 million in 2017, according to credit ratings agency Moody's Investors Service Inc. Marketo Chief Executive Officer Steve Lucas will join Adobe's senior leadership, the companies said.

Adobe has been on something of a shopping spree lately. Adobe purchased Magento Commerce for $1.7 billion in June to enter the market for e-commerce.

Reuters had exclusively reported earlier this month that Adobe was in talks to buy Marketo. Morgan Stanley and Kirkland & Ellis advised Marketo and Vista Equity Partners.

Adobe's shares were little changed in extended trading after closing at $266.34 in NY.

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