Business

Thursday September 17, 2009

Adobe plans to buy Omniture for US$1.8bil


BOSTON/SEATTLE: Adobe Systems Inc plans to pay US$1.8bil for fast-growing business software maker Omniture Inc as the maker of Photoshop and Acrobat looks to turn around declining sales.

Adobe, which announced the deal on Tuesday as it reported lower quarterly sales and profit, has been struggling over the past year as the recession hurt technology spending and customers declined to upgrade older versions of its programmes.

The acquisition would give Adobe a new stream of revenue to offset that decline. Omniture charges customers fees based on monthly website traffic, so sales are less sensitive to economic swings than Adobe.

“There is no way Adobe can grow organically. This is a smart move,” said Global Equities Research analyst Trip Chowdhry.

Advertising agencies and companies use Omniture’s software to analyse how consumers use websites. It is the biggest provider of such services, competing with Google Inc and other smaller players. The vast majority of all professional websites are built with Adobe’s Creative Suite line of design software.

Adobe, whose software competes with products from Microsoft Corp and Apple Inc, agreed to pay US$21.50 per share in cash for Omniture, a 24% premium over Omniture’s closing price on Tuesday.

Omniture would become a unit of Adobe, headed by its current chief executive, Josh James. Adobe said the deal should close in the fourth quarter of fiscal 2009 and would add to Adobe’s per-share earnings in fiscal 2010.

Adobe also reported on Tuesday that fiscal third-quarter earnings, excluding items, fell to 35 cents per share from 50 cents per share a year ago. Second-quarter sales fell 21% percent to US$697.5mil, but beat analysts’ average forecast of US$686.2mil. — Reuters


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