Analysts Digesting News of Salesforce, ExactTarget Deal, Consider Implications for Marketo
As traders in shares of Salesforce.com (NYSE: CRM) and ExactTarget (NYSE: ET) are responding to news of a $33.75/share deal for the former to purchase the latter Tuesday afternoon, analysts in the sector are also responding to the takeover. In addition to comments on Salesforce and ExactTarget, several analysts are also discussing the possible impacts on peers like Marketo (NASDAQ: MKTO).
Piper Jaffray analyst Mark Murphy believes the $2.5 billion deal presents potential to transform the fragmented e-mail marketing segment into a “big opportunity” for Salesforce.com. On the other side of the trade, Roth Capital analyst Nathan Schneiderman suggested the deal may cause “medium-term problems” for Marketo.
Schneiderman pointed out Marketo currently receives 90 percent of its sales from the customer base of Salesforce.com. Without long-term written contract with Salesforce.com, ExactTarget presents a direct threat to Marketo's revenue intake.
Analyst Kirk Materne from Evercore said the ExactTarget acquisition may, over the long term, put Salesforce.com on top of the emerging cloud-based marketing sector. He argued skeptics on the deal are likely to focus on the price and organic growth over the next few years, but assured strategic rationale is likely to outweigh these concerns over the long term.
Shares of Salesforce.com last traded down 3.6 percent, shares of ExactTarget are up more than 52 percent, and shares of Marketo are down nearly 8 percent. Shares of another peep in the sector, Responsys (NASDAQ: MKTG), are up nearly 6 percent at last check.
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