M&A Alert—June 27, 2013
Adobe Acquires Marketing Automation Company Neolane for $600mm
Author: Eric F. Risley
Transaction Size: $600mm
On June 28, 2013, Adobe (NASDAQ: ADBE; market cap: $22.9b) announced the acquisition of multi-channel marketing automation company Neolane for $600mm.
Neolane provides a cloud-based marketing automation platform that allows large companies to manage and automate their marketing efforts across various engagement channels, including Web, e-mail, social, mobile, direct mail, call center and point of sale.
More than 400 global B2C and B2B companies use Neolone’s platform, including Alcatel Lucent, Barnes & Noble, Disneyland Resorts, IKEA, Motorola, Samsung, Sears Canada and Sony Music. Neolane integrates with multiple CRM systems such as Salesforce.com, Microsoft Dynamics CRM and Oracle CRM On Demand.
Founded in 2001, Neolane is based in Paris, France with additional offices in the United States, United Kingdom, Denmark and Deutschland. Neolane has raised $33.6mm in funding from Auriga Partners, Battery Ventures (Greg Smithies, Michael Brown, Morad Elhafed), W Capital Partners and Xange Private Equity.
Adobe is a leading provider of desktop software for creative professionals and software development such as Flash, Photoshop, Illustrator and Dreamweaver. Adobe has been making a big push in recent years to capitalize on the proliferation of digital marketing, via its acquisitions of Efficient Frontier in 2012, Demdex and Auditude in 2011, Day Software in 2010 and Omniture in 2009. Adobe integrates these into its comprehensive Marketing Cloud solution.
SVP and GM of Adobe’s Digital Marketing business, Brad Rencher, was the main executive sponsor of this transaction.
Adobe is paying $600mm in cash for Neolane. In 2012, Neolane recorded $58.0mm in revenue for 2012, representing 40% year-over-year growth.
Transaction Value: $600mm
TV/2012 Revenue ($58.0mm) 10.3x
Digital marketing has been an extremely active area of M&A activity over the past year. Comparable transcations include Salesforce’s acquisitions of ExactTarget ($2.5b and 8.6x revenue), Buddy Media ($745mm and 29.8x revenue) and Radian6 ($340mm and 9.7x revenue), Oracle’s acquisitions of Eloqua ($871mm and 9.7x revenue), Vitrue ($300mm and 3.0x revenue) and Involver, Google’s acquisition of Wildfire($350mm), ExactTarget’s acquisition of Pardot ($96mm and 12.9x revenue), IBM’s acquisition of Unica ($490mm and 4.1x revenue) and Teradata’s acquisitions of Aster Data ($260mm) and Aprimo ($525mm and 7.4x revenue).
Neolane brings Adobe an enterprise marketing department focused product offering to complement Adobe’s existing creative agency centered efforts. Neolane is the sixth element of the Adobe Marketing Cloud, complementing the existing Analytics, Target, Social, Experience Manager and Media Optimizer offerings.
Architect Partners’ Observations
Oracle and Salesforce.com both recently announced major digital marketing acquisitions, with Oracle bolstering its Marketing Cloud with Eloqua for $871mm and 9.7x LTM revenue in December 2012 and Salesforce’s addition of ExactTarget to its Marketing Cloud this June for $2.5b and 8.6x LTM revenue. Today Oracle, SAP, IBM, Saleforce and Adobe all offer a fairly full suite of marketing management products, all largely assembled in the past year.