Adobe to buy Magento for US$1.68b
SAN FRANCISCO: Adobe Systems Inc agreed to buy e-commerce company Magento for US$1.68 billion (RM6.7 billion), in a bid to capture a bigger slice of the digital commerce industry from Salesforce.com Inc and Oracle Corp.
The Photoshop software provider was making its thirdbiggest acquisition to create an end-to-end system for designing digital advertisements, building e-commerce websites and other online customer experiences and completing transactions, it said in a statement on Monday.
Magento offers software to build and run web stores, handle online purchases, shipping and returns.
It also helps merchants sell products through social media ads and competes with Shopify Inc.
Magento technology supports more than US$155 billion in gross merchandise volume, and customers include Canon Inc and Rosetta Stone Inc.
EBay Inc sold Magento in 2015 and it has been backed by private equity firm Permira Holdings LLP since then.
Adobe has sought to diversify from the digital media products that made it one of the world’s largest software companies.
The deal is slightly smaller than Adobe’s 2009 purchase of Omniture, which made the company a player in digital advertising.
The Magento purchase would see the company battle cloudbased commerce services from Salesforce, Oracle and SAP SE.
This part of Adobe’s business, known as its Experience Cloud, generates less revenue and grows more slowly than its creative software offerings like Photoshop.
Adobe also announced an US$8 billion share buyback programme through 2021.
The company’s shares rose about one per cent in extended trading after closing at US$238.10 in New York.
The deal for Magento is expected to close in the third quarter of Adobe’s fiscal year. Adobe will gain access to Magento’s midmarket and large corporate customers, and gain a foothold in physical store and online transactions.