Adobe Systems Inc. (ADBE) is planning to acquire e-commerce services firm Magento Commerce for $1.68 billion. The closure of the transaction is anticipated to take place in Adobe’s third quarter of 2018. Magento, which was acquired by Permira Holdings in 2015 from eBay, has several clients including Canon.
Magento is based in California and is a competitor of Shopify. The firm provides software that helps manage e-commerce operations like purchases and returns among other things. Nestle, Coca-Cola, and Cathay Pacific are some of Magento’s customers who also do business with Adobe. After the acquisition, Magento’s operations will be joined with Adobe’s Digital Experience group and will continue to be run by its current CEO Mark Lavelle.
The acquisition is the largest one done by Adobe in around ten years, and it is expected to strengthen the company’s capabilities in digital marketing and advertisement, which come under its Enterprise Cloud division. The deal will help Adobe, a leader in digital content, to expand into the area of online commerce in terms of website development and ad design. The transaction is also part of Adobe’s efforts to solidify its competitive position against rivals like Oracle and Salesforce.
Adobe disclosed plans to buy back $8 billion of its shares through the fiscal year 2021
Adobe also disclosed plans to buy back $8 billion of its shares through the fiscal year 2021, an expansion on its existing $2.5 billion share repurchase plan that runs through FY 2019. The repurchase plan, which is to be financed using operating cash flow, is not expected to impact this year’s earnings significantly. Adobe’s shares rose slightly following the news while Shopify shares saw a drop.