Categories Earnings, LATEST, Technology

Adobe to buy Marketo, defying Salesforce dominance

Adobe Systems (ADBE) has agreed to buy marketing software company Marketo for $4.75 billion. The largest ever deal for Adobe, will help it to give stiff competition to Salesforce (CRM), which has dominated the marketing automation division since 2013 when it acquired ExactTarget for $2.5 billion.

The deal will bring together Adobe Experience Cloud analytics, content, personalization, advertising and commerce capabilities, and Marketo’s lead management and account-based marketing technology under the same leadership.

The transaction is expected to close during the fourth quarter of Adobe’s fiscal 2018. Until the transaction closes, each company will continue to operate independently.

Upon close, Marketo executive chief Steve Lucas will join Adobe’s senior leadership team and continue to lead the Marketo team as part of Adobe’s Digital Experience business, reporting to executive vice president and general manager Brad Rencher.

In 2016, private equity firm Vista Equity Partners has taken Marketo private for about $1.8 billion. A fight emerged in that year between Adobe and Microsoft (MSFT) to buy Marketo, but Vista outran the fight and emerged as the winner in taking Marketo.

In 2006, a group of co-founders, including Phil Fernandez, started Marketo. Phil was executive chief through Marketo’s public listing in 2013 and later stepped down in 2016 after Vista acquired the company. Phil was replaced by Steve Lucas, who had solid experience from SAP’s platform and analytics group as well as Salesforce.

Marketo’s main competitor Eloqua, which went public in August 2012, was acquired by Oracle (ORCL) for $871 million four months after its IPO.

Shares of Adobe ended Thursday’s regular session up 0.55% at $266.34 on the Nasdaq. The stock inched up slightly in the after-hours session.

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