Adobe Systems Inc - Major Acquisitions

MAJOR ACQUISITIONS

Adobe wanted to secure a desktop publishing application for its PostScript printing language. In 1994, it approached Aldus Corp., maker of PageMaker, the leading desktop publishing program for both Macintosh and Windows operating systems. A $450 million merger completed later that year secured Adobe's position as a leading PC software manufacturer among giants like Microsoft, Novell, and Lotus. The deal also positioned Adobe as a market leader in design and illustration software, image editing, and electronic document technology—areas that would prove essential to its emergence as a leader in Web publishing.

Adobe's second major acquisition—the $31.5 million purchase of Frame Technology Corp., maker of the Unix-based FrameMaker desktop publishing program—proved ill fated. Adobe was unfamiliar with Frame's enterprise market, and the unit began to lose money soon after the transaction was completed in 1995. Consequently, Adobe's stock price plunged more than 50 percent to $33 per share in July of 1996, compared to a high of approximately $74 per share earlier that year.