Microsoft To Acquire LinkedIn
Microsoft Corporation and LinkedIn Corporation on Monday announced they have entered into a definitive agreement under which Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIn’s net cash.
LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft.
Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction. The transaction is expected to close this calendar year.
This deal brings together the world’s leading professional cloud with the world’s leading professional network,a move that helps refocus the US tech giant around cloud computing and services.
The move also comes with Microsoft refocusing its efforts away from being a pure software firm, and LinkedIn seeking ways to boost growth.
LinkedIn, which enables members to connect with similar-minded professionals and facilitates job hunting, has some 433 million members worldwide.
But LinkedIn in the past quarter reported a loss of $46 million and a $166 million loss for 2015, which let its shares to fall early this year.
He added that the deal “is key to our bold ambition to reinvent productivity and business processes. Think about it: How people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world.”
LinkedIn, which calls itself “the world’s largest and most valuable professional network,” has been seeking to expand its offerings with more messaging, mobile applications and revamped its “news-feed” to help boost engagement.
“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said in a statement.
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.
LinkedIn connects the world’s professionals to make them more productive and successful and transforms the way companies hire, market, and sell. Our vision is to create economic opportunity for every member of the global workforce through the ongoing development of the world’s first Economic Graph. LinkedIn has more than 400 million members and has offices around the globe.
Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.