Marketo stock soared in afternoon trading today amid reports the company was considering strategic options, including a possible sale.
Marketo stock closed up 24.69 percent to $26.77 on speculation that the company is actively courting a buyer. The San Mateo, Calif.-based marketing automation powerhouse, which went public in 2013, is said to be working with Morgan Stanley on the possible sale.
The reports surfaced over the buzz of Marketo’s Marketing Nation Summit in Las Vegas this week. They come on the heels of similar chatter last month.
Who Would Buy Marketo?
Alex Zukin, managing director and senior research analyst in the software sector for Piper Jaffray, told CMSWire Microsoft or SAP are likely buyers should the rumors prove true. "We think it makes total sense," Zukin said, noting the acquisition price could be in the $30 to $35 per share range.
Marketo has declined to comment on the possible sale.
What Would Microsoft, SAP Gain?
Microsoft has a marketing suite but is not known for marketing automation like Marketo. SAP has dabbled into automation but is also, like Microsoft, not known as a major marketing automation player like Marketo or Oracle (via Eloqua).
Marketo produced some strong numbers in its latest quarterly report. First quarter revenue increased 35 percent year over year to $62.2 million.
"Our first quarter performance marks a solid start to 2016, as we saw strong revenue growth and improved operating leverage," Phil Fernandez, chairman and CEO of Marketo, said during an investor's call late last month.
"Marketing automation has expanded beyond just the marketing department and is becoming a strategic weapon among CMOs, as well as CIOs and the entire C-suite. Marketo is well-positioned to capitalize on the broader market opportunity in 2016, as companies expand their digital transformation agendas."