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Adobe to buy marketing software firm Marketo for $4.75 billion

Adobe Systems Inc on Thursday agreed to buy Marketo Inc for $4.75 billion from private equity firm Vista Equity Partners Management, adding heft to its cloud-based digital marketing business. The U.S. Photoshop maker is sharpening its focus on the fast-growing cloud business, a fiercely competitive market dominated by Microsoft Corp , Oracle Corp and Salesforce .

Adobe Systems Inc on Thursday agreed to buy Marketo Inc for $4.75 billion from private equity firm Vista Equity Partners Management, adding heft to its cloud-based digital marketing business.

The U.S. Photoshop maker is sharpening 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 will complement Adobe`s digital marketing business, which provides cloud-based tools to help create, manage and analyse advertising and marketing campaigns, the companies said.

Marketo, started in 2006 as an email marketing service, was taken private by Vista for $1.8 billion in 2016.

The San Mateo, California-based company generated revenue of about $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 Marketo Chief Executive Officer Steve Lucas will join the company`s senior leadership team and continue to lead the Marketo team, Adobe said.

After Vista acquired Marketo, it changed its management team, adding Lucas, a former SAP SE executive, as the CEO in 2016, who helped revive sales growth at the company.

Adobe has been on something of a shopping spree lately. In May it agreed to buy cloud-based e-commerce services provider Magento Commerce from private equity firm Permira for $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 and Kirkland & Ellis advised Marketo and Vista Equity Partners.

Adobe shares were up marginally in extended trading.

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