Adobe's Planned Marketo Buy: A $4.75B Bet On Enterprise Digital Transformation

Adobe, already one of the world's largest software companies and a leader in digital document and digital experience, is planning to become an even bigger part of enterprise digital transformation moves with its planned acquisition of Marketo.

Adobe on Thursday confirmed press speculation that the San Jose, Calif.-based software vendor had plans to acquire San Mateo, Calif.-based Marketo.

Adobe plans to acquire Marketo, a privately-held developer of a cloud platform for business-to-business marketing, for $4.75 billion.

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With the acquisition, Adobe, with reported fiscal 2017 revenue of $7.3 billion and a workforce of over 19,000, will have access to Marketo's marketing technology ecosystem of more than 500 partners and over 65,000 members.

If the acquisition goes through as planned, Marketo will be Adobe's second major software acquisition this year following its May acquisition of e-commerce platform developer Magento for $1.68 billion.

Adobe and Marketo spokespeople were not available to comment further on the planned acquisition.

However, Steve Lucas, Marketo CEO, wrote in a Thursday blog post that the combination of Adobe and Marketo will place customer experience and engagement in the center of digital transformation.

The two together will be a major force in the business-to-consumer and business-to-business enterprise market, Lucas wrote.

"Marketo’s exceptional lead management, account-level data, and multi-channel marketing capabilities will combine with Adobe’s rich behavioral dataset to create the most advanced, unified view of the customer at both an individual and account level. The result will be an unprecedented level of marketing engagement, automation, and attribution power," he wrote.

After the acquisition closes, Lucas is expected to report to Brad Rencher, executive vice president and general manager for digital experience at Adobe.

Rencher, in a prepared statement, said marketers are looking for focused ways to provide relevant, personal, and engaging experiences to customers. "The acquisition of Marketo widens Adobe’s lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing," he said.

Adobe said it expects to take advantage of the Marketo Engagement Platform, a cloud-native offering for business-to-business marketing planning, engagement, and attribution, to its enterprise customers.

Adobe also said that, with the acquisition, Marketo will get Adobe's global operation scale, reach into new verticals and geographies, and access to a large new enterprise customer base.

The acquisition is slated to close during Adobe's fourth fiscal quarter of 2018, which ends late November.

Adobe stock was down .17 percent in after-hours trading on Thursday to $266.34.