Adobe is in negotiations to buy Marketo, according to sources for Reuters. Marketo is owned by private equity firm Vista Equity Partners, which took the company private two years ago.
According to Reuters, if a deal is reached it would be worth significantly more than the $US1.8 billion — a 64 per cent premium — Vista shelled out for the martech business in 2016, in what at the time was regarded as a fully-priced offer.
“There is, however, no certainty the talks between Adobe and Vista Equity will lead to a deal, the sources cautioned, asking not to be identified because the matter is confidential. It is not clear how much Adobe would pay for Marketo,” the report states.
Both Adobe and Marketo declined to comment when contacted by Which-50.
An industry leader with many years of experience in the marketing technology sector, and a long time competitor of Adobe described it as a brilliant move, if true.*
He said it solves the problem with Adobe Campaign, which he described to Which-50 as “suboptimal”.
“The heritage of Adobe Campaign is on-premise and the cloud migration hasn’t gone particularly well. Whereas Marketo is a cloud solution and much better than the one they’ve got today.”
“It makes sense to me,” he said.
Marketo was founded in 2006 as an email marketing service and its heritage is predominantly in the B2B space.
Under Vista’s ownership and a new leadership team, Marketo has invested hundreds of millions of dollars in product, engineering, and growth efforts to bolster its marketing engagement platform.
Earlier this year Marketo announced its platform has successfully delivered 30 billion emails and captured 400 billion marketing engagements in the last 12 months.
Central to its product development plan is a strategic partnership with Google Cloud, which now delivers the infrastructure for Marketo’s applications in its public cloud as well as providing input on machine learning products that are being built into the martech platform.
“The Google decision was about how can we maximise the disruption in marketing, tear up the playbook, and deliver an entirely new set of capabilities,” Marketo CEO Steve Lucas told Which-50 earlier this year.
Earlier this year Marketo completed its largest acquisition buying Bizible, a provider of marketing performance management software which specialises in attribution.
Follow the money
After a brief hiatus, M&A activity in the martech space has ramped up again this year. In May, Adobe acquired Magento for $US1.68 billion, adding an ecommerce platform to its experience cloud. Just a month later Marketo-owner Vista Equity acquired a majority stake in advertising measurement firm Integral Ad Science.
In July The Wall Street Journal profiled Vista Private Equity and its investment strategy, noting it is yet to unload some of its biggest bets.
“The goal of the Austin, Texas-based firm, which is 18 years old, is to transform business-software companies into profit machines,” the authors wrote.
*No, he doesn’t work for Marketo.