"A mistake is simply another way of doing things."
-Katharine Graham
June 01,2016
Vista Equity Partners Takes Marketo Private
Financial Information
- Enterprise Value $1.6 Billion
- EV/LTM Revenue 6.9x
Transaction Facts
- Vista Equity Partners, a software and IT focused private equity firm, announced yesterday that it will acquire all shares of the marketing automation company Marketo (Nasdaq: MKTO) for $35.25 per share.
- Vista’s offer is a 64% premium over Marketo’s May 9th closing price (shares jumped on a news report that the company was considering a sale). It is a 9% premium to the stock’s Friday closing price.
- The company announced continued revenue growth in its latest earnings announcement in April, but it also operated at a loss (and expected to continue doing so going forward).
Securing A Presence in a Desirable Space
- Making Moves: This is Vista’s second major acquisition in the marketing space so far this year, having acquired event management company Cvent for $1.65 billion in April. Advertising and marketing technology is increasingly valuable as companies compete to monetize online users – Marketo and Cvent are the two largest US software take-private deals.
An Unexpected Twist: Many observers expected a strategic buyer to absorb Marketo, with names like Microsoft appearing in the press as a potential acquirer as recently as Friday. As the company has shifted its aim from small and mid-market accounts to larger accounts, it risks increased completion with tech giants like Salesforce, Oracle, or Adobe.- Disinterest in Tech Enables PE Play: The market has shied away from many technology stocks this year, especially those like Marketo operating at a loss. Consequently, Marketo shares lost almost half their value from the beginning of the year by mid-February. This, combined with Vista’s flush funding (the company is currently raising its sixth fund, with a cap of $10 billion) makes such large plays especially viable and strategic.
An Unexpected Twist: Many observers expected a strategic buyer to absorb Marketo, with names like Microsoft appearing in the press as a potential acquirer as recently as Friday. As the company has shifted its aim from small and mid-market accounts to larger accounts, it risks increased completion with tech giants like Salesforce, Oracle, or Adobe.For more information about this transaction, click here to read the press release.
martinwolf was not the advisor in this transaction.
