The Cloud

Vista Equity to Take Marketo Private for $1.79B

Marketo, a cloud-based marketing software firm, fetched a 64% premium to its unaffected closing price on May 9.
Matthew HellerJune 1, 2016

Vista Equity Partners is adding to its technology-oriented portfolio of investments by acquiring cloud-based marketing software provider Marketo for $1.79 billion, its biggest deal to date.

Marketo had been the subject of speculation it would be sold to a tech giant such as Microsoft or SAP. But in the deal announced Tuesday, the company will be taken private by Vista for $35.25 in cash per share, representing a 64% premium to the unaffected closing price as of May 9.

Marketo supplies automation software for inbound marketing, social marketing, customer relations management, and other related services. The stock closed up 9.4%, at $35.23, on Tuesday.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

“The acquisition will allow Marketo to continue to … set the agenda for product innovation and thought leadership for the entire digital marketing industry,” CEO Phil Fernandez said in a news release. “It will also enable us to … give tomorrow’s marketers and the C-suite an ultra-high-scale enterprise platform for customer engagement.”

In its most recent quarter, Marketo reported a GAAP net loss of $18.4 million, or 42 cents a share, on revenue of $62.2 million.

“The company’s fortunes have grown in line with a bigger trend on the Internet towards more ad tech and corresponding ‘martech’ (marketing tech) to squeeze more data out of the browsing public,” TechCrunch said.

But Marketo had predicted continuing losses this year, which, TechCrunch noted, “could have been especially challenging in a current public market climate which has been less rosy on tech stocks.”

For Vista Equity, the acquisition comes one month after it bought event management software company Cvent for $1.65 billion. “Marketo is the clear leader in the marketing automation space and has consistently delivered innovative mission critical products to its more than 4,600 customers,” said Brian Sheth, the private-equity firm’s co-founder and president.

“Given our proven track record and focus on investing in high-growth SaaS platforms, we are thrilled to partner with Phil and the broader Marketo team to help the company accelerate innovation, growth, and excellence,” he added.

Understanding Which ERP Modules Your Business Needs – And When