Adobe (NASDAQ: ADBE) announced it is purchasing the privately-held ecommerce company Magento for $1.68 billion in a cash and stock transaction. The deal caught many by surprise, but the market responded favorably.
Why Did Adobe Acquire Magento?
For Adobe and its competition in the multichannel campaign management segment, full-featured ecommerce solutions have become an integral part of their offering. Adobe will now be able to bring Magento Commerce into its Adobe Experience Cloud for a platform serving B2B and B2C customers around the world.
Small businesses using the Adobe suite of services and Magento’s ecommerce platform together will have to wait and see how the merger will benefit them. Mark Lavelle, CEO of Magento, said in a press release, “We’re excited to join Adobe and believe this will be a great opportunity for our customers, partners and developer community.”
On the official Magento blog, Lavelle wrote, “… we will enable every business to create and deliver compelling real-time experiences, engage with customers across every touchpoint, and transact anywhere across the entire customer journey for both B2C and B2B.”
Who are Adobe and Magento?
Adobe is one of the largest software companies in the world. The company has been diversifying beyond its hugely popular suite of applications, including Photoshop, Illustrator, InDesign and many others. It has now moved into digital advertising and CRM, with the only feature left out of its offering being ecommerce.
Magento provides an open-source software for building and running web stores, handling online transactions, shipping and returns. Canon, Burger King, Huawei and Rosetta Stone are Magento customers, and Coca-Cola, Warner Music Group, Nestlé and Cathay Pacific are joint customers with Adobe.
Magento has been ranked as the second best Ecommerce platform in Inc.’s 2018 list, with Shopify taking first place.
What Adobe Expects From the Transaction
As Adobe explains, “Consumers and businesses now expect every interaction to be shoppable — whether on the web, mobile, social, in-product or in-store.” With Magento’s platform, Adobe acquires a unified commerce platform with shopping experiences driven by a community of more than 300,000 developers.
Adobe will have digital commerce, order management and predictive intelligence for physical and digital goods across a range of industries.
The transaction is expected to close during the third quarter of Adobe’s 2018 fiscal year, and both companies will operate independently until then.