Software giant Adobe buys Orem's Omniture for $1.8B

One software heavyweight is taking over another in a $1.8 billion deal that may result in a handful of layoffs now but ultimately could lead to more jobs in Utah.

Adobe Systems Inc., the world's largest graphic-design program maker, will acquire Orem-based Omniture Inc., which makes software that helps companies measure the effectiveness of their online ads.

Omniture CEO and co-founder Josh James, who will become a senior vice president and report to the Adobe CEO after the acquisition, told the Deseret News Tuesday that of the 600 employees based in Orem, "the vast majority of people are going to be retained, and in fact our business will grow. Our footprint will grow. I expect to see more people at Omniture than less."

Adobe, which makes Flash, Acrobat and Photoshop software, said Tuesday during an earnings report it will buy Omniture for about $1.8 billion, or $21.50 per share in cash, a premium of 24 percent to Omniture's closing stock price Tuesday.

Trip Chowdhry, an analyst with Global Equities Research, said the deal would allow Adobe, which is based in San Jose, Calif., to create new streams of revenue even as its existing businesses face a decline. The recession and the corresponding decline in technology spending has hurt Adobe's profit and revenue, as many companies have put off upgrading costly software packages.

Though he called the deal "very timely," Chowdhry believes Adobe is overpaying for Omniture, especially because that company's paid products have been losing market share to Google's analytics service, which is free. He said $12 to $13 per share — rather than $21.50 — would have been a fair value for the company.

The deal is expected to close in November. Between now and the closing, James said negotiations are still under way and he didn't know if any Utah employees would have to move to the Bay Area, but he noted that Utah salaries tend to be lower, and Adobe may not want to transfer people.

Employees will likely benefit as being part of the Adobe company, James said. Fortune magazine named the company No. 11 on its most recent list of the top 100 companies to work for among companies with 2,500-10,000 U.S. employees. "They have sabbatical programs," he said, "and good benefits. They really care about people."

Omniture offers a variety of Web traffic analysis and other products for companies to improve their marketing over the Internet. Its customers include Apple Inc., Time Warner Inc. and Walt Disney Co.

James, the Omniture CEO, said the acquisition will result in automation of Omniture's services.