REUTERS: Adobe Systems Inc on Thursday agreed to buy Marketo Inc for US$4.75 billion from private equity firm Vista Equity Partners Management, adding heft to its cloud-based digital marketing business.
The acquisition comes as the Photoshop maker sharpens its focus on the fast-growing cloud business, a fiercely competitive market dominated by Microsoft Corp, Oracle Corp and Salesforce.
Marketo's business-to-business marketing applications offering complements Adobe's digital marketing business, which provides cloud-based tools to help create, manage and analyze advertising and marketing campaigns.
Marketo, started in 2006 as an email marketing service, was taken private by Vista Equity Partners for US$1.8 billion in 2016.
The San Mateo, California-based company generated revenue of about US$321 million in 2017, according to credit ratings agency Moody's Investors Service Inc.
The deal is expected to close in the fourth quarter of Adobe's fiscal 2018 and that Marketo Chief Executive Officer Steve Lucas will join the company's senior leadership team and continue to lead the Marketo team, Adobe said in a statement.
Adobe in May agreed to buy cloud-based e-commerce services provider Magento Commerce from private equity firm Permira for US$1.68 billion.
Reuters had exclusively reported earlier this month that Adobe was in talks to buy Marketo.
JP Morgan advised Adobe, while its legal adviser was Hogan Lovells. Morgan Stanley advised Marketo, while Kirkland & Ellis advised Vista Equity Partners.
Adobe shares were up marginally in extended trading.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva)