Microsoft to acquire LinkedIn
Microsoft Corp. and LinkedIn Corporation announced on Monday that 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.
Over the past year, LinkedIn has launched a new version of its mobile app that has led to increased member engagement, enhanced the LinkedIn newsfeed to deliver better business insights, acquired an online learning platform called Lynda.com to enter a new market and rolled out a new version of its Recruiter product to its enterprise customers. These innovations have resulted in increased membership, engagement and financial results, specifically:
- 19% growth year over year (YOY) to more than 433m members worldwide
- 9% growth YOY to more than 105m unique visiting members per month
- 49% growth YOY to 60% mobile usage
- 34% growth YOY to more than 45 billion quarterly member page views
- 101% growth YOY to more than 7m active job listings
Nadella said, “The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals.
“Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”
Weiner commented, “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.
“For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.”
The transaction has been unanimously approved by the boards of directors of both LinkedIn and Microsoft. The deal is expected to close this calendar year and is subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.
Hoffman stated, “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.
“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% 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. In addition, Microsoft also reiterated its intention to complete its existing $40 billion share repurchase authorisation by 31st December 2016, the same timeframe as previously committed.
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 & Co. are acting as financial advisors to LinkedIn, while Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal advisor.
Original story sourced from LinkedIn: https://press.linkedin.com/site-resources/news-releases/2016/microsoft-to-acquire-linkedin