Adobe said today it’s agreed to buy analytics and metrics firm Omniture for $1.8 billion in cash, or $21.50 a share. Customers want to integrate Adobe’s online products like Flash with services like those offered by Omniture, Adobe CEO Shantanu Narayen said during the conference call announcing the deal. With the purchase, Adobe diversifies its product offerings and takes advantage of the fast-growing SaaS market, on which Omniture focuses.
|What the web is saying:|
|Media Memo: Adobe is offering $21.50 in cash for each Omniture share. That’s a 25 percent premium over today’s closing price of $17.32–which includes a large run-up in the last few hours of the day, before trading was halted around 3:45 pm EDT. Good bet the folks at the Securities and Exchange Commission will take a look at that leap.|
|Daily Finance: Today’s blockbuster acquisition by Adobe of Web analytics and optimization provider Omniture for $1.8 billion in cold hard cash may not fully answer the question, but it is a very positive sign — not just for tech, but for the broader mergers and acquisitions market, as well as the economy as a whole.|
|Charles Nicholls: That the Omniture leadership sold up at this point, after such rapid growth, indicates that they’ve been out of fresh ideas. The stock price of course is about one half of what is was two years ago, although it has had a good run in the last few months, in common with many other stocks. But you don’t sell up if you’re hell bent on revolution.|
|BloggingStocks: The deal for Omniture is not about cost synergies. Instead, it’s a way to expand the revenue base, which will get lots of help from Adobe’s distribution footprint. Of course, customers are looking for ways to monetize web assets — and Omniture has the kinds of tools that allow for this. Omniture will also give Adobe a strong cloud-computing platform as well as a recurring revenue model. True, the margins will be lower because of infrastructure costs. But over time, these should fall.|
Narayen said it was “clear customers would like [Adobe] to do a lot more.” Media companies want to understand which rich video content is performing the best, for example, while advertisers and ad agencies that use Flash to produce online ads want to know the click-through rate of those ads in real time. Currently, Omniture integrates with Flash, but with the companies under the same umbrella, Adobe hopes to sell more of Omniture’s products to its existing customer base. One analyst noted during the Q&A that “all Omniture customers are probably Adobe customers, but not the other way around,” leaving a large customer base to which Adobe can push its wares.
Adobe has $2.6 billion in cash and short-term investments; company execs said it’s financing the deal through cash on hand and its existing credit facility.