Ahead Of The Curve: M&A Key To Adobe’s Cloud Conversion

Ahead Of The Curve: M&A Key To Adobe’s Cloud Conversion

About five years ago, Adobe started to ask its customers to convert to a cloud-based subscription model to purchase and update products from its prized Creative Suite, the package that includes Photoshop and Illustrator. At first, it didn’t go over too well. But the risk has paid off, with Bloomberg reporting that Adobe’s revenue nearly reached $5.9 billion for the year ended in November, a roughly $2 billion bump over the $4 billion figure the company posted in 2013. And key to Adobe’s success have been its acquisitions.

Ahead of the curve

Since 2012, Adobe has completed 10 M&A deals, according to the PitchBook Platform. The company has spread those bets across various verticals, including adtech and SaaS, with the pickups contributing to its broader push into cloud-based offerings across its portfolio—not least with last year’s purchase of online advertising company TubeMogul for more than $500 million.

However, it’s the acquisition of analytics software provider Omniture for $1.8 billion in 2009 that foreshadowed not only Adobe’s subsequent acquisitive activities but also those of the wider tech industry in North America and Europe.

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SaaS acquisitions by corporate investors

At the time of the Omniture acquisition, Adobe told investors that the company was betting on the SaaS provider to leave its new parent “well positioned to deliver solutions that can transform the future of engaging experiences and e-commerce across all digital content, platforms, and devices.” It wouldn’t take long before it seemed like nearly every tech company was calling itself a cloud-computing company or offering services in the cloud. But Adobe wouldn’t do so explicitly until 2013.

Since 2012, when Adobe started moving to a subscription model, 3,478 corporate acquirers have stumped for a SaaS company, completing 3,515 deals in North America and Europe, per PitchBook data. After reaching 2015’s peak of 947 deals, representing some $58 billion of total capital invested, activity has dropped roughly a third to 654 completed acquisitions in the space last year.

PitchBook Platform users can check out the full data on corporate M&A activity in the SaaS industry. Not a subscriber? Contact us today to set up a demo.

Article by Adam Putz, PitchBook

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