Date
21 October 2018
Adobe's acquisition of e-commerce firm Magento is an example of the company's increased investment in the marketing analytics business. Photo: Bloomberg
Adobe's acquisition of e-commerce firm Magento is an example of the company's increased investment in the marketing analytics business. Photo: Bloomberg

Adobe to acquire e-commerce firm Magento for US$1.68 billion

Adobe, the maker of the popular Photoshop and Illustrator creative programs, is acquiring Magento, an e-commerce services provider for enterprises, for US$1.68 billion, TechCrunch reports.

Adobe said it has entered into a definitive agreement to acquire Magento from private equity firm Permira, subject to customary purchase price adjustments.

“The addition of the Magento Commerce Cloud will enable commerce to be seamlessly integrated into the Adobe Experience Cloud, delivering a single platform that serves both B2B and B2C customers globally,” the company said.

The deal is expected to close in the third quarter of 2018 fiscal year.

Founded in 2008, Magento is a cloud-based e-commerce service used by companies. Like its rival Shopify, Magento helps companies to operate their online stores, handle the complexities of e-commerce and boost revenue.

Adobe and Magento share customers like Warner Music Group, Coca-Cola, and Nestlé.

Magento recorded a revenue of US$150 million in 2017, Forbes reported, citing data from Adweek. The e-commerce software maker had 16 percent of the e-commerce platform market, compared with Shopify’s 13 percent, according to Aheadworks.

Brad Rencher, digital experience executive at Adobe, said: “Embedding commerce into the Adobe Experience Cloud with Magento enables Adobe to make every moment personal and every experience shoppable.”

“Adobe and Magento share a vision for the future of digital experiences that brings together Adobe’s strength in content and data with Magento’s open commerce innovation,” said Magento CEO Mark Lavelle said.

Customer relationship management (CRM) expert Brent Leary told TechCrunch that the Magento acquisition would let Adobe “have an offering that allows them to close the loop with consumers, who are able to finalize a digital transaction that started online with digital marketing tools Adobe already offered”.

The deal is also believed to be an example of Adobe’s increased investment in marketing analytics, a business in which it competes with companies like Oracle and Salesforce.

Magento was purchased by eBay in 2011 in a deal reported to be about US$180 million. It went private again in 2015 with the help from Permira Funds, which is said to have paid about US$200 million, TechCrunch said.

The latest deal represents a huge increase in the company’s value since its purchase in 2011.

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