Adobe Systems Inc. (ADBE) announced on Monday that it has decided to acquire e-commerce firm Magento Commerce in a transaction valued at $1.68 billion. The deal will help the company to boost its shares in the digital-commerce industry, where it competes against Salesforce.com and Oracle Corp.
The San Jose, California-based company is making its third-largest deal to develop an end-to-end system for making digital ads, designing e-commerce websites beside other online customer experiences.
Magento specializes in providing software to make and run web stores, manage online transactions, distribution and returns. Its technology supports gross merchandise volume of more than $155 billion and has customers such as Rosetta Stone, Helly Hansen, and Canon Inc. eBay sold Magento to a private equity firm Permira in 2015.
The latest deal indicates that Adobe is somehow trying to expand beyond its digital media products, which made it one of the biggest software companies globally. The transaction is its second biggest after Omniture purchase, back in 2009, which helped the company in strengthening its foothold in digital advertising.
The Photoshop software provider also announced an $8 billion share repurchase program through the next three years. The company intends to fund the program from its future cash flow and it won’t have a material affect on its profit for the current fiscal year.
The Magento transaction, subject to regularity consent, is expected to close during the third quarter of the company’s fiscal year.
Adobe shares slightly moved up in the after-hours trading session on Monday following the announcement.
Chief Executive Officer at Magento, Mark Lavelle said that the deal would help his company in accelerating its commerce progress.
Shares of Magento’s competitor Shopify fell more than 3 percent in the extended trading following the news.