Marketo, Qlik Acquired by Private Equity Firms

Marketo, a provider of engagement marketing software and solutions, is being acquired by private equity investment firm Vista Equity Partners for $1.79 billion, while Qlik, a provider of visual analytics, is being acquired by another investment firm, Thoma Bravo, for roughly $3 billion.

The two separate deals, which are mostly stock transactions, are expected to close in the third quarter of this year.

Denis Pombriant, founder and managing principal of Beagle Research, fears that the purchase prices for both firms might have been a bit too high, "given that the private equity firms intend to make a profit." That, he says, will likely require the investment firms to resell these entities on the public markets in a few years. While not impossible, "given these companies' positioning, it raises some concerns," he adds.

Marketo, Pombriant points out, "is a stand-alone marketing automation company that needs to partner with a variety of other CRM vendors. It might make a lot of sense for them to be acquired by another full-function CRM vendor, but that list is narrowing."

The deal, he says further, "may represent a moment when there's too much capital chasing too few opportunities in [Silicon] Valley."

But Carlos Hidalgo, CEO and founder of demand generation firm Annuitas, a Marketo partner, has a different take: He calls the Marketo acquisition further validation of the marketing technology space and proof of its growth.

Hidalgo does note, though, that the Marketo deal is nearly twice what Oracle paid for marketing technologies provider Eloqua in late 2012. That deal was valued at roughly $871 million.

Phil Fernandez, chairman and CEO of Marketo, says the acquisition isn't likely to change much at the company he co-founded in 2006.

"The acquisition will allow Marketo to continue to focus on customer success and to remain the independent category leader, continuing to set the agenda for product innovation and thought leadership for the entire digital marketing industry," he said in a statement. "It will also enable us to successfully deliver on the bold vision we recently set forth: to give tomorrow's marketers and the C-suite an ultra-high-scale enterprise platform for customer engagement."

"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, co-founder and president of Vista, in a statement. "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."

By going the private equity route, Marketo will still be able "to focus on its broader vision of a marketing platform," Hidalgo adds. "In looking at recent history of some MarTech acquisitions, many of the acquired companies have struggled to pursue their vision and best serve their customers given competing priorities by their larger acquirers. Marketo's route to being acquired hedges against this happening, which is a big win for their customers."

Meanwhile, Qlik's CEO, Lars Björk, expects little to change at his company either. The acquisition by Thoma Bravo will provide the company "with additional flexibility to execute our strategic plan as we continue to diligently provide customers with the premier products and services they have come to expect," he said in a statement. "Thoma Bravo recognizes the value that Qlik delivers: a platform that lets our customers see the whole story that lives within their data. Thoma Bravo has an excellent track record of investing in outstanding technology businesses for the long-term, and I am confident our employees, customers and partners will greatly benefit from our partnership with them."

"We look forward to partnering with the Qlik team as they continue to grow their platform-based approach to business intelligence (BI) and analytics," said Orlando Bravo, a managing partner at Thoma Bravo, in a statement. "As the need for analytic solutions grows, Qlik is well-positioned to continue to drive innovation and lead the market."

"Qlik's platform blends best-in-class associative analytics and visualizations with data governance, scalability, and interoperability," added Seth Boro, a managing partner at Thoma Bravo, in the statement. "We are excited by Qlik's product roadmap and confident that we can apply our experiences working with market-leading software companies to accelerate Qlik's growth and market share across all geographies."

Marketo will remain at its current location in San Mateo, Calif., while Qlik will maintain its corporate headquarters in Radnor, Pa.

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