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Microsoft to acquire LinkedIn for $26.2 bn in cash

news
13 June 2016

Software giant Microsoft today announced plans to acquire professional networking platform LinkedIn for $26.2 billion in an all-cash deal. LinkedIn will retain its brand and independence, and existing CEO Jeff Weiner will remain in control, reporting directly to Microsoft CEO Satya Nadella.

Redmond, Washington-based Microsoft Corp said the two companies 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.

Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully supported the transaction, Microsoft stated in a news release. The transaction is expected to close this calendar year, it added.

LinkedIn is the world's largest and most valuable professional network and continues to build a strong and growing business. Over the past year, the company has launched a new version of its mobile app that has led to increased member engagement and enhanced the LinkedIn newsfeed to deliver better business insights,

LinkedIn also acquired a leading 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 - innovations that resulted in increased membership, engagement and financial results, Microsoft noted.

LinkedIn reported:

  • A 19 per cent growth year over year to more than 433 million members worldwide;
  • A 9 per cent growth YOY to more than 105 million unique visiting members per month;
  • A 49 per cent growth YOY to 60 per cent mobile usage;
  • A 34 per cent growth YOY to more than 45 billion quarterly member page views; and
  • A 100 percent growth YOY to more than 7 million active job listings

''The LinkedIn team has grown a fantastic business centered on connecting the world's professionals,'' Nadella said. ''Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet.''

''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. ''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, according to a joint releaser.

''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 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 per cent 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.

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.

LinkedIn connects the world's professionals in a way 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.





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