According to a person familiar with this matter, Adobe Systems is planning to close the deal for about $5 billion. So far this would be the biggest deal for Adobe and an announcement about the deal could be made in the next few days said the person who asked not to be identified as the matter isn’t public yet.
In 2016, Marketo was bought by the private equity firm, Vista Equity Partners for $1.8 billion.
The deal will prove to be very strategic for Adobe as it will increase its grip in the business-to-business space as Marketo presents B2B marketing applications. The deal would also enhance Adobe’s cloud based software offerings as it takes on bigger peers like Microsoft, Oracle, and Salesforce.com.
The deal has “competitive implications for Salesforce,” analyst Terry Tillman of SunTrust Robinson Humphrey wrote in a note to clients earlier this week.
“Adobe has increasingly become a competitor to Salesforce, especially post its recent acquisition of Magento in the digital commerce market. Given Marketo’s market leadership serving the marketing automation needs of enterprise B2B organizations, consolidation of Marketo could create increased competitive dynamics in Salesforce’s Marketing Cloud business,” Tillman wrote.
Salesforce and Marketo have collaborated together for years, however their relationship was strained in 2013 when Salesforce acquired Marketo’s contender ExactTarget for $2.5 billion. In due course ExactTarget became the Salesforce Marketing Cloud.
San Jose, California based Adobe has been on a look out for possible acquisitions. In May this year it bought e-commerce services provider Magneto Commerce for $1.68 billion from private equity firm Permira. So far Adobe’s biggest acquisition has been Macromedia Inc that was purchased for $3.4 billion in 2005.
Based out of San Mateo, California, Marketo was founded in 2006 as a company that provides email marketing service. According to credit ratings agency Moody’s Investors Service last year the company generated revenue of about $321 million.