By Vibhuti Sharma and Liana B. Baker
(Reuters) - Adobe Systems Inc on Thursday agreed to buy Marketo Inc for $4.75 billion (3.5 billion pounds) from private equity firm Vista Equity Partners Management, adding heft to its cloud-based digital marketing business.
The U.S. Photoshop maker is sharpening its focus on the fast-growing cloud business, a fiercely competitive market dominated by Microsoft Corp, Oracle Corp and Salesforce.
Marketo's business-to-business marketing applications will complement Adobe's digital marketing business, which provides cloud-based tools to help create, manage and analyse advertising and marketing campaigns, the companies said.
Marketo, started in 2006 as an email marketing service, was taken private by Vista for $1.8 billion in 2016.
The San Mateo, California-based company generated revenue of about $321 million in 2017, according to credit ratings agency Moody's Investors Service Inc.
The deal is expected to close in the fourth quarter of Adobe's fiscal 2018 and Marketo Chief Executive Officer Steve Lucas will join the company's senior leadership team and continue to lead the Marketo team, Adobe said.
After Vista acquired Marketo, it changed its management team, adding Lucas, a former SAP SE executive, as the CEO in 2016, who helped revive sales growth at the company.
Adobe has been on something of a shopping spree lately. In May it agreed to buy cloud-based e-commerce services provider Magento Commerce from private equity firm Permira for $1.68 billion.
Reuters had exclusively reported earlier this month that Adobe was in talks to buy Marketo.
JP Morgan advised Adobe, while its legal adviser was Hogan Lovells. Morgan Stanley and Kirkland & Ellis advised Marketo and Vista Equity Partners.
Adobe shares were up marginally in extended trading.
(Reporting by Vibhuti Sharma in Bengaluru; editing by Anil D'Silva and Rosalba O'Brien)