Marketo gets scooped up into the private world for US$1.79 billion

Customers are worried because of the buyer's reputation, one analyst says

Marketing-software maker Marketo has agreed to be acquired by private equity firm Vista Equity Partners for US$1.79 billion, the company announced Tuesday.

Marketo shareholders will receive $35.25 in cash per share -- a sum the company says represents a 64 percent premium over its closing price earlier this month, before reports emerged that it was exploring strategic alternatives.

The deal is expected to close in the third quarter of 2016. Marketo's headquarters will remain in San Mateo, California, the company said.

"The acquisition will allow Marketo to continue to focus on customer success and to remain the independent category leader," said Phil Fernandez, Marketo's chairman and CEO.

Marketo's marketing-automation software is designed to help companies develop long-term relationships with their customers. Shares of the company's stock were up more than 9 percent on Tuesday.

Some Marketo customers are worried by the acquisition, according to Ray Wang, founder and principal analyst with Constellation Research.

"In the past, when Vista has made acquisitions like this, such as of Tibco, they've done weird things," Wang explained.

Asking employees to take "weird management tests" is one example, Wang said. "That's part of the process."

So, in addition to the talent loss that Marketo would have naturally experienced following its 2013 initial public offering (IPO), there will likely be "a little bit of an exodus" following this latest news, he predicted.

Private equity firms like Vista also "typically stretch out R&D investment," Wang said, pushing out deadlines on projects already under way. They often tend to reduce expenditures on sales and marketing as well, as a way of cutting costs.

"Pretty soon it's just about keeping a maintenance stream of customers and not really growing the market," he explained. "What most of our customers are worried about is the lack of innovation that could occur, especially given Vista's reputation."

That's not to say that there aren't potential upsides to the deal, however. Vista has already made numerous other acquisitions of related technologies, so "they could make some synergies here," said Cindy Zhou, a vice president and principal analyst with Constellation Research.

Vista owns a number of technology companies including workflow management vendors, Autotask and Aptean, advertising software player, Mediaocean, email optimisation vendor, Return Path, enterprise data management provider, Tibco, and telecoms software solutions company, Telarix.

Vista Equity Partners couldn't immediately be reached for comment.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Launch marketing council Episode 5: Retailer and supplier

In our fifth and final episode, we delve into the relationship between retailer and supplier and how it drives and influences launch marketing strategies and success. To do that, we’re joined by Campbell Davies, group general manager of Associated Retailers Limited, and Kristin Viccars, marketing director A/NZ, Apex Tool Group. Also featured are Five by Five Global managing director, Matt Lawton, and CMO’s Nadia Cameron.

More Videos

Hi,When online retailers establish their multi channel strategy and they are using or will to use live chatbot to support their customers...

Alice Labs Pte. Ltd.

CMO's top 8 martech stories for the week - 6 May 2021

Read more

Thanks for nice information regarding Account-based Marketing. PRO IT MELBOURNE is best SEO Agency in Melbourne have a team of profession...

PRO IT MELBOURNE

Cultivating engaging content in Account-based Marketing (ABM)

Read more

The best part: optimizing your site for SEO enables you to generate high traffic, and hence free B2B lead generation. This is done throug...

Sergiu Alexei

The top 6 content challenges facing B2B firms

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Check out tiny twig for comfy and soft organic baby clothes.

Morgan mendoza

Binge and The Iconic launch Inactivewear clothing line

Read more

Blog Posts

Getting privacy right in a first-party data world

With continued advances in marketing technology, data privacy continues to play catchup in terms of regulation, safety and use. The laws that do exist are open to interpretation and potential misuse and that has led to consumer mistrust and increasing calls for a stronger regulatory framework to protect personal information.

Furqan Wasif

Head of biddable media, Tug

​Beyond greenwashing: Why brands need to get their house in order first

Environmental, Social and (Corporate) Governance is a hot topic for brands right now. But before you start thinking about doing good, Craig Flanders says you best sort out the basics.

Craig Flanders

CEO, Spinach

​The value of collaboration: how to keep it together

Through the ages, from the fields to the factories to the office towers and now to our kitchen tables, collaboration has played a pivotal role in how we live and work. Together. We find partners, live as families, socialise in groups and work as teams. Ultimately, we rely on these collaborative structures to survive and thrive.

Rich Curtis

CEO, FutureBrand A/NZ

Sign in