Microsoft to Acquire LinkedIn in An All-Cash Deal Valued at $26.2B

From Left to Right: Jeff Weiner, Satya Nadella and Reid Hoffman

From Left to Right: Jeff Weiner, Satya Nadella and Reid Hoffman

Microsoft and LinkedIn have entered into a definitive agreement under which Microsoft will acquire the latter for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIn’s net cash. The deal is expected to close by the end of 2016.

LinkedIn will operate as an independent entity with Jeff Weiner as the CEO, reporting to Satya Nadella.

In 2012, it was rumoured that Microsoft is indeed acquiring the professional network, which Weiner waived off.

The companies also announced LinkedIn’s metrics, which are as below

  • 19% growth year over year (YOY) to more than 433 million members worldwide
  • 9% growth YOY to more than 105 million unique visiting members per month
  • 49% growth YOY to 60 percent mobile usage
  • 34% growth YOY to more than 45 billion quarterly member page views
  • 101% growth YOY to more than 7 million active job listings

“Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers and look forward to supporting this new and combined business,” said Reid Hoffman. “I fully support this transaction and the Board’s decision to pursue it, and will vote my shares in accordance with their recommendation on it.”

“Microsoft will finance the transaction primarily through the issuance of new indebtedness. Upon closing, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment. Microsoft expects the acquisition to have minimal dilution of ~1 percent to non-GAAP earnings per share for the remainder of fiscal year 2017 post-closing and for fiscal year 2018 based on the expected close date, and become accretive to Microsoft’s non-GAAP earnings per share in Microsoft’s fiscal year 2019 or less than two years post-closing. Non-GAAP includes stock-based compensation expense consistent with Microsoft’s reporting practice, and excludes expected impact of purchase accounting adjustments as well as integration and transaction-related expenses. In addition, Microsoft also reiterated its intention to complete its existing $40 billion share repurchase authorization by Dec. 31, 2016, the same timeframe as previously committed.” the announcement said.

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Morgan Stanley is acting as exclusive financial advisor to Microsoft, and Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Qatalyst Partners and Allen & Company LLC are acting as financial advisors to LinkedIn, while Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal advisor.