Adobe acquires Web software maker for US$240 million

Day Software makes Web software, including content management and digital asset management

Adobe Systems has agreed to buy Web software maker Day Software Holding in a deal worth US$240 million, the company said in a statement Wednesday.

Day Software, of Basel, Switzerland, specializes in web content management, digital asset management and social collaboration, which Adobe plans to use to strengthen its enterprise software offerings, it said in the statement.

"With the addition of Day to our enterprise portfolio, we will be able to enhance the value of our offering and deliver on our vision of the Web as the hub of customer interaction," the U.S. software vendor said.

Day will become a product line within Adobe's Digital Enterprise Solutions Business Unit, and Day's CEO, Erik Hansen, will join Adobe as part of the deal.

Adobe will launch a tender offer for Day's publicly held stock shares, an offer that Day's board of directors has already voted to recommend, according to the statement.

The deal is subject to government approval before it can be finalized. Adobe expects to close the deal in the fourth quarter of its 2010 fiscal year, which is later this calendar year.

Along with Adobe's own technologies, the Day products constitute "a complete solution for building and running global, compelling websites and multi-channel customer experiences," according to a FAQ document.

With the Day acquisition, Adobe is focused on those areas and has no intentions of competing head-on in the general ECM (enterprise content management) arena, said Erik Larson, senior director of product management.

But Day customers who currently use the platform primarily for basic content management should not be concerned, he added. "From a technology standpoint, there's a set of common needs regardless of whether you're looking at core ECM or customer experience."

However, the Day acquisition could have implications for Adobe's existing partnership with ECM vendor Alfresco. Larson could not provide specifics about the future of that relationship, which resulted in Adobe embedding Alfresco's software into its LiveCycle Enterprise Suite.

Other questions remain unanswered as well, such as "whether Adobe can really sell enterprise-grade, customizable software," analyst Apoorv Durga of the Real Story Group said in a blog post.

"Their history of selling shrink-wrapped, lower-priced, high-volume software has built the firm into a Silicon Valley giant, but their ability to sell small-scale but very high-value enterprise software deals remains untested," Durga added. "The biggest danger for current Day customers may be that Adobe will want to take the technology, and over time commoditize it into shrink-wrapped, low-cost functionality bundles."

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Tags business issuesmergers & acquisitionsAdobe SystemssoftwareinvestmentsDay Software Holding

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