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Adobe inks Pact to buy Magento for $1.68Bn to dive into E-commerce

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Published on : May 23, 2018

The interplay between marketing and customer relationship management solutions is vital to harnessing the potential of e-commerce platforms for customers of all hues. Technology players are collaborating with enterprise resource planning software providers to fit the missing piece of e-commerce in the customer engagement platform. A multinational computer software company Adobe Systems Inc. (Adobe) announced on March 21, 2018 that will it buy Magento Commerce for US$1.68 billion from European private equity firm Permira. The transaction consisting of all cash is likely to be closed by the Adobe’s Q3 this year.

Capitalizing on e-commerce Capabilities of Magento’s Offerings to raise the ante for Salesforce

With the deal, Adobe plans to offer tough competition to cloud computing company Salesforce.com which made a strategic partnership in 2016 and has been offering similar features. Of note, Magento was acquired by eBay Inc. in 2015 as a part of multi-billion deal in 2015. Since then, Magento has focused more on small and medium business customers while Adobe counts enterprise as its forte. Thus it remains to be seen how the acquisition will pan out over time. Interestingly, several companies, including Salesforce, who has made similar moves was motivated by the enterprise demographic.  

Deal will help Photoshop maker to fill Gap in its Experience Cloud Business

The deal will enable the U.S.-based Photoshop maker to bolster its offering of e-commerce solution meant for B2B and B2C segments. More importantly, the deal will help it add massive strength to Experience Cloud business that cater to various services such as advertising, marketing, and analytics.

According to Adobe, the provider is one-of-its kind offering advertising, analytics, marketing, and content creation, with the advantage of real-time experiences for its customers; the only missing was e-commerce. On the other hand, Magneto has committed huge funds in areas of open-source community ecosystem, marketing, technology, client success, and sales. This has enabled it to fortify its enterprise cloud business to an extent as it counts several big and mid-sized companies as its customers. Post the deal, the current valuation of the company is pegged at $1.7 billion.

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