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The clouds are one hot place to be.

Adobe Systems Inc.'s (ADBE) - Get Adobe Inc. Report $1.68 billion purchase of Permira-backed Magento Inc. highlights the growing competition with Inc. (CRM) - Get Salesforce Inc. Report and others in e-commerce cloud niches.

"It was becoming increasingly apparent that Adobe really needed to add this e-commerce piece to fully build this robust digital marketing portfolio they have established over the last several years," Morningstar Inc. analyst Rodney Nelson said.

Adobe initially pursued Demandware Inc., Nelson observed, before Salesforce acquired the e-commerce platform for $2.8 billion in 2016. "This was viewed as a very glaring gap in their portfolio," Nelson said.

With Adobe looking for e-commerce firepower, The Deal suggested last year that the company could buy Magento or Shopify Inc. (SHOP) - Get Shopify Inc. Class A Subordinate Report . Shopify closed down 4% to $138.75 on Tuesday, but is up nearly 38% on the year.

Adobe gained 0.3% to close at $238.79 on Tuesday. It's worth noting that Jana Partners and Third Point's Dan Loeb acquired new positions in Adobe this past quarter shortly before this big deal. Elsewhere in the sector, Keith Meister's Corvex and Third Point have new stakes.

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As large software groups vie for premium cloud assets in a range of niches, analysts suggest software-as-a-service companies such as Coupa Software Inc. (COUP) - Get Coupa Software Incorporated Report , HubSpot Inc. (HUBS) - Get HubSpot Inc. Report , ServiceNow Inc. (NOW) - Get ServiceNow Inc. Report , RingCentral Inc. (RNG) - Get RingCentral Inc. Class A Report and Trade Desk Inc. (TTD) - Get The Trade Desk Inc. Report Imperva Inc. (IMPV) - Get Imperva, Inc. Report , and Nuance Communications Inc. (NUAN) - Get Nuance Communications Incorporated Report could be attractive. The companies did not immediately respond to queries on Tuesday.

"The Magento acquisition is the latest confirmation of the lines between sales, service, marketing and e-commerce blurring faster than we can recall," Stifel Nicolaus & Co. analyst Tom Roderick wrote in a Tuesday report.

Companies with more than $200 million in recurring revenues that trade at less than 5 times recurring sales include front-office applications developers such as Nuance, infrastructure software companies such as Cornerstone OnDemand Inc. (CSOD) - Get Cornerstone Ondemand, Inc. Report and security outfit Imperva, Roderick noted. Cornerstone OnDemand declined to comment. 

With the capital markets "open for software" and "strong company cash balances," Oppenheimer and Co. analyst Brian Schwartz suggested in a report, software-as-a-service deals will pick up in the second half of the year.

"We believe many of the largest technology companies, like Adobe, have strong balance sheets for stimulating greater M&A activity over the next 12 months," Schwartz wrote. "In our opinion, the acquirers desire unique SaaS technology assets for growth, innovation, and to prevent market share erosion." 

Adobe expects to close the purchase of Magento -- also known as X.Commerce Inc. -- in its third fiscal quarter.

Editor's note: The full version of this article was published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.