$1.8B deal may mean Omniture expansion By Tom Harvey The Salt Lake Tribune
Adobe Systems Inc.’s offer to buy Omniture Inc. of Orem for $1.8 billion should mean accelerated growth for the largest high-tech company headquartered in Utah.
Adobe said Tuesday it is willing to pay a premium price to acquire Omniture in the biggest high-tech deal in state history. If the transaction closes during the fourth quarter as expected, Omniture will become a new business unit within Adobe but remain in Utah.
Omniture co-founder and CEO Josh James is to join Adobe as senior vice president of the new business unit. James said Tuesday that the acquisition should allow Omniture to more quickly reach its goal of a billion dollars of revenue a year. It had about $350 million in revenue in 2008.
“They’re one of the largest software companies in the world, and this is going to be one of the largest parts of their business and one of fastest growing parts of their business,” James said. “So they’re going to actually invest in and really grow this business.”
That expansion should mean additional employees in the future, he said of the company that employs 600 or so people in Orem and 1,200 worldwide.
“We’re going to continue to grow rapidly and right here in Utah,” said James, who cofounded the company in 1996 while a student at Brigham Young University.
Adobe is offering $21.50 a share cash for the Utah company, about 24 percent above its closing price on Tuesday.
Sasa Zorovic, an analyst at Janney Montgomery
Scott LLC in Boston, called the sale price a “very generous offer.”
“Adobe may be paying a premium for Omniture, but the deal makes sense,” said Zorovic. “From the perspective of Web designers [using Adobe’s products], many will be very interested in seeing how their work is performing.”
Omniture has been the fastest-growing or second-fastest publicly traded U.S. software company the past three years, James said. It is the leading company for software tools and services to track Web page traffic and improve online marketing. Among its customers are eBay, Wal-Mart, Microsoft, Neiman Marcus, Oracle and Sony.
Adobe is best known for its graphics design tools that include Illustrator; its Flash software that allows videos, animation and interactive elements to be placed on and viewed over the Web; and for Photoshop, its digital photograph processing software. Web page builders turn to Adobe for design tools that include DreamWeaver, another of its acquisitions.
In a conference call with analysts and the news media, Adobe President and CEO Shantanu Narayen said the deal made sense for his company because customers who buy its software tools to create Web sites were demanding ways to measure how effective they are in selling goods and services.
“What is interesting is a number of these companies actually wanted us to integrate with these solutions like Omniture,” Narayen said.
He also said the cultures of the two companies were similar, making for an easier merger.
“One of the very attractive parts [of Omniture] is the people and the culture,” he said. “They have a real passion for solving company problems, a history of delivering innovative products.”
James said he felt comfortable that Omniture employees would continue to have a good environment. Adobe was No. 11 on the Fortune 100 list of best places to work, he said.
“That’s really important for me in this type of a combination. One of the things you value is taking care of your people.”
Narayen declined to comment on whether there were other bids for the company.
If the deal closes, it will leave James with $25.4 million for his 1.18 million shares of Omniture.
“They want me to keep running this business,” he said. “They want our people to keep running this business.”
The announcement came after the close of the markets on Tuesday. Omniture’s shares finished at $17.32 Tuesday, then soared $4.47, or 25.8 percent, to $21.79 in after-hours trading.
Adobe’s shares took a hit in after-hours trading, falling $1.50, or 4.2 percent, to $34.12. The stock had closed at $35.62 in regular trading earlier Tuesday.
Reporter Steve Oberbeck contributed to this story.
Get Your Own Stock Trading Robot At http://www.StockETrade.com
No comments yet.