Adobe Targets E-Commerce With $1.68 Billion Magento Buy
Taking on Salesforce and Oracle, Adobe has announced it’s purchasing e-commerce services provider, Magento, for a whopping US$1.68 billion cash – its largest deal in nearly a decade.
Californian-based Magento is used by several Australian retailers including Harvey Norman and Bing Lee. The software allows clients to build and run e-commerce web stores, handle online purchases, facilitate returns and more.
The deal is expected to close in fiscal year Q3, and is pending regulatory approval.
Taking on SAP SE, Oracle and Salesforce, the acquisition seeks to boost Adobe’s ‘Experience Cloud’ division, which has historically grown at a slower rate than Photoshop.
The company also announced an $8 billion share buyback program through fiscal year 2021 – expected to be funded via future cash flow.
As such, the program is not expected to impact current fiscal year earnings.
Following the news, shares in Adobe climbed around 1% in extended trading to US$238.10.
The deal sees Adobe purchase Magento from private equity firm ‘Permira’. The firm purchased Magento from eBay Inc in 2015, and has reportedly made five times its initial stake of US$200 million.