Adobe Systems Inc. (NASDAQ: ADBE)announced on Monday that it has entered into an agreement to acquire Magento Commerce for $1.68 billion.
Magento is a private California-based e-commerce platform that offers cloud commerce to merchants across B2C and B2B industries. The company was sold partially to eBay (NASDAQ: EBAY) before being fully acquired by Permira.
In 2017, Chinese investment firm Hillhouse Capital invested $250 million in Magento, put its valuation at $700 million at the time. Permira said Hillhouse will be selling its stake in the part of the deal as well.
The acquisition will integrate Magento Commerce Cloud into Adobe Experience Cloud onto the single platform that offers B2C and B2B to customers. Adobe’s Cloud segment offers services such as analytics, advertising and marketing.
“Adobe is the only company with leadership in content creation, marketing, advertising, analytics and now commerce – enabling real-time experiences across the entire customer journey,” said Brad Rencher, executive vice president and general manager at Adobe. “Embedding commerce into the Adobe Experience Cloud with Magento enables Adobe to make every moment personal and every experience shoppable.”
Magento customers include brands such as Canon, Helly Hansen, Paul Smith and Rosetta Stone, handling over $150 billion in gross merchandise volume. According to FactSet data, eBay (NASDAQ: EBAY) processed $88.4 billion in 2017, while Amazon.com Inc. (NASDAQ: AMZN) processed $313.4 billion.
Adobe and Magento share joint customers including Coca-Cola, Warner Music Group, Nestlé and Cathay Pacific.
The acquisition should help Adobe bolster its position especially against competitors such as Salesforce (NYSE: CRM), who also offers similar services. Salesforces also made a strategic acquisition back in 2016 by buying Demandware for more than $2 billion.
Magento CEO Mark Lavelle will continue to lead Magento team as part of Adobe’s Digital Experience business, reporting to Brad Rencher.
The transaction is expected to close in the third quarter of this year.