Adobe confirmed on Thursday that is acquiring Marketo, a cloud platform for B2B marketers, for $4.75 billion.
Marketo’s engagement platform will be integrated with Adobe Experience Cloud -- strengthening Adobe against Microsoft and Oracle, commentators say.
Started in 2006 as an email marketing service, Marketo was brought private in 2016 by Vista Equity Partners Management LLC for $1.8 billion, according to Reuters, which broke the story about merger talks earlier in the week. Last year, it reportedly generated revenue of $321 million.
Marketo CEO Steve Lucas will join Adobe's senior leadership team and continue to head the Marketo unit, reporting to Brad Rencher, executive vice president and general manager.
The sale is expected to close in Adobe’s fourth quarter, subject to regulatory approval. Both firms will operate independently until then.
The deal combines Adobe’s analytics, content, personalization and commerce capabilities with Marketo’s lead management and account-based marketing technology, Adobe says. The goal is to extend Adobe’s B2C capacities to B2B.
Both firms believe in “the power of content and data to drive business results,” Lucas states.
Marketo brings nearly 5,000 customers to the table, along with 500 partners.
Jon Miller, co-founder of Marketo and now CEO of Engagio, says: “This is an amazing outcome for Vista and Marketo employees, and it's a sign that there is a lot of money to be made in marketing technology. I believe this will spur additional investment (and consolidation) in martech, especially B2B marketing platforms. That said, marketing technology has evolved a lot in the almost 13 years since we started Marketo, and new trends like Account Based Marketing and post-sale expansion are driving companies to rethink what they need in their B2B platform."
Miller adds: "It will be interesting to see what moves Adobe -- and their competitors -- make to evolve their platforms for these new trends."
Engagio offers an ABM automation platform.
Some observers are concerned that the integration could hurt effectiveness. It proves that“there continues to be consolidation of martech and related tech firms these last few years – in particular, by strategic vendors such as Adobe, Salesforce, IBM and Oracle,” says Sean Brady, president of Emarsys Americas.
However, Lucas contends that “there is no better home for Marketo to continue to rapidly innovate than Adobe.”