Adobe rumoured to be in talks to buy Marketo

Industry analysts weight in on digital marketing giant being reportedly in discussions to purchase B2B marketing automation vendor, Marketo, from its private equity owners

Adobe is reportedly in talks to purchase best-of-breed marketing automation vendor, Marketo.

According to reports this morning on Reuters, the marketing platform giant is in active discussions with Marketo’s private equity owner, Vista Equity Partners, who took over the business two years ago in a deal worth $1.8 billion. The report suggests the price tag Adobe can expect to pay will be significantly higher than that paid by Vista when it acquired the vendor from its founders, although the price tag has not been disclosed.

According to Reuter’s sources, there is no certainty the talks between Adobe and Vista will lead to a deal, and neither party has commented on the discussions.

While Adobe has been rapidly building out an enterprise-grade marketing technology stack, the purchase of Marketo would certainly add a much-needed B2B capability to the portfolio. Marketo was established in 2006 and is arguably one of the last standalone, best-of-breed marketing automation players in the martech lumascape.  

Last year, Marketo generated revenues of US$321 million, according to Moody’s Investor Service as quoted by Reuters. Adobe, on the other hand, has a market capitalisation of US$130 billion with annual revenue of US$7.3 billion.

Adobe is certainly not shy to growing via acquisition, either. Most recently, the vendor bolstered the digital commerce capabilities of its Adobe Experience Cloud by purchasing Magento for US$1.68 billion in May.

Adobe’s digital marketing offering in fact began with the acquisition of Web analytics platform, Omniture, back in 2009 in a deal worth US$1.8 billion. It followed this up with acquisitions such as Web content management software vendor, Day Software, in 2010; audience optimisation vendor, Demdex, in 2011; cross-channel campaign management platform, Neolane, in 2013; community engagement tech, Livefyre in 2016; and video adtech player, TubeMogul, in 2016.

Marketo hasn’t been averse to acquisitions either. On its list are performance management vendor, Bizible in April this year; sales enablement platform, ToutApp, in 2017 to grow its account-based marketing (ABM) offering; Vessel in 2015; Insightera and Optify in 2013; and Crowd Factory in 2012.

Speaking to CMO about the rumours, principal of Pund-IT research firm, Charles King, said it's highly likely that when Vista bought Marketo in 2016, it had an eventual sale in mind. He noted the firm lists more than 40 companies in its current portfolio, and nearly 30 are in the "former" category.

"In other words, acquiring and building/rebuilding businesses that it then sells for a profit is in VEP's DNA. Plus, it's likely that the $2 billion the company is likely to get for Marketo can be put to good use in current assets or future acquisitions," he said.

King agreed Adobe pursuing Marketo makes strategic and practical sense as it actively expands its digital marketing business.

"However, since the company already paid out US$1.7 billion for Magento in May, some might argue that doing another large deal in such short order would be foolhardy. But that really depends on how a deal is structured," he continued. "With nearly $3 billion currently on its books, Adobe could certainly afford to consider moving ahead.

"Plus, if Adobe believes that a major competitor, such as Microsoft, Oracle, SAP or Salesforce is sniffing around Marketo, it might be well-worth extending itself to take the company off the board."

IDC analyst, Gerry Murray, pointed out there have been plenty of rumours about Marketo's sell-off over the years. He could see some big positives in Adobe picking up the business, one of which is the US$300 million in revenue. Another is the mid-to enterprise B2B market customer base that might align well with the Magneto base, while a third is it takes a competitor off the table.

"But there are obviously huge functional overlaps in the marketing campaign management space making it doubtful that it will be entirely additive," Murray said. "Marketo is also tied to Google Cloud while Adobe is committed to Microsoft Azure, so that will need to be reconsidered. 

"Under private equity ownership, Marketo has been under greater pressure to cut cost and boost bottom line performance. But is it a good match? It's certainly a surprise. If Adobe wants to be the customer experience system of record I'd think they'd want to look into capabilities outside marketing like the Magneto deal."

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu  

 

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

Blog Posts

5 cornerstones of a strong digital culture

Creating a strong company culture may sound like a daunting task, but it’s actually pretty straightforward. In fact, company culture is created in exactly the same fashion as a religion or democracy. Behaviours created from the organisation’s inception are reinforced over time by leadership, attracting like-minded people and eventually reaching critical mass to become an accepted ‘truth’.

Anthony Stevens

Founder and CEO, Digital Asset Ventures

Should you rebuild your company’s tech stack in blockchain?

The question I get asked most regularly these days is: ‘Do I need to rebuild my company’s systems on Blockchain?’ And the answer, every time, is ‘No, you’re asking the wrong question’.

Michelle O'Keeffe

CEO, Engaging.io

Customer value proposition: Getting the brand promise to your customers right

Throughout my career, I have witnessed a litany of brand names that profess to have a unique customer value proposition (CVP). In reality, however, they’ve had little more than a ‘value proposition’: A simple list of benefits applied to a general audience.

Ric Navarro

Global director of marketing and communications, Norman, Disney & Young

Hi there! Thanks for this interesting article! I love to read about new technology and software that makes our lives easier. I'm looking ...

Julia Summer

Wartsila overhauls Web platforms to create ‘seamless’ brand experience across all devices

Read more

RE: Sales and marketing SLAs, often the choke point isn't the teams but them getting the data into the tools they want to use with the da...

Ed Fry

Why sales and marketing alignment is more important than ever

Read more

Thank you for the good and very helpful information. It is very interesting. I love all the things you share and see your beautiful creat...

รัตนาวดี ภูมิวรรณ

Former eHarmony marketing chief joins telco startup

Read more

Colin Kaepernick, not Mike Kapernick.

thisisw

Zenith's innovation leader: Mid-digital age not benefitting media, brands or consumers

Read more

AGA KHAN HOSPITAL is in need of kidney donors for the sum of 2 crore, Contact us today if you want to sell your kidney for money, and thi...

Sebastian Friedrich

Mindshare gets behind blockchain advertising alliance

Read more

Latest Podcast

More podcasts

Sign in