Adobe Buys Marketing-Automation Firm Marketo for $4.75 Billion

By Alexandra Bruell 

Adobe Systems Inc. agreed to acquire marketing-automation firm Marketo for $4.75 billion, its largest acquisition ever and the latest sign of its ambition to become a one-stop-shop for marketers.

San Mateo, Calif.-based Marketo helps brands track their customers' actions online, from getting an email to purchasing a product, providing them with information they can use to serve more personalized promotions.

The deal is expected to add scale to Adobe's existing marketing-technology capabilities. It also will bolster the company's clout with business-to-business brands, which make up the bulk of Marketo's customer base. Reuters earlier reported that Adobe and Marketo were in talks last week.

Adobe has been focusing on building and buying capabilities for business-to-consumer brands, and wants to expand relationships with its existing clients in categories like telecommunications and financial services that have both business-to-consumer and business-to-business divisions, Chief Executive Officer Shantanu Narayen said in an interview. "We thought we had a really unique opportunity to leverage everything we had done with content management and advertising and analytics to serve a broader set of customers," he said.

Marketo was bought by private-equity firm Vista Equity Partners in 2016 for $1.79 billion. Marketo generated revenue of approximately $321 million in 2017, according to Moody's Investors Service Inc.

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. The Experience Cloud reported annual revenue of $2.03 billion in 2017, according to a financial filing.

Marketo CEO Steve Lucas will continue to lead the Marketo team, reporting to Brad Rencher, Adobe's executive vice president and general manager of digital experience.

The transaction is expected to close during the fourth quarter of Adobe's 2018 fiscal year.

Adobe has acquired a number of marketing automation firms in recent years. The company made its first big bet on digital marketing services in 2009 with it acquisition of data-analytics firm Omniture for $1.8 billion. In 2010, it bought Day Software, which allows customers to build websites and apps, for $240 million And in 2016, it acquired TubeMogul, a company that helps brands plan and buy ad space across digital and TV platforms, for $540 million.

This year, it acquired commerce technology firm Magento for $1.68 billion.

Write to Alexandra Bruell at [e-mail]

(END) Dow Jones Newswires

September 20, 2018 16:21 ET (20:21 GMT)

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