Microsoft To Buy LinkedIn For $26.2 Billion Cash
Microsoft and LinkedIn today entered into an agreement where Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, which also includes LinkedIn’s net cash. Though LinkedIn will continue to operate independently as a brand. Jeff Weiner will remain CEO of LinkedIn and will report directly to Satya Nadella, CEO of Microsoft. This transaction is expected to be completed by the end of the year and is fully supported by Jeff Wiener and Reid Hoffman chairman of the board, co-founder and controlling shareholder of LinkedIn.
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.”
Both the Board of Directors of Microsoft and LinkedIn unanimously in support of approving the transaction. The transactions are expected to be closed by the end of the year, though approval from LinkedIn’s shareholders and satisfaction of certain regulatory approvals and general procedures before closing.
“Today is a re-founding moment for LinkedIn. I see an 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. After the closure, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment. According to Microsoft the expected acquisition will have minimum dilution of 1% to non-GAAP earnings per share for the remainder of the fiscal year 2017 post- closing and for fiscal year 2018 based on the expected closing 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 on the purchase of accounting adjustments as well as integration and transaction-related expenses. In addition, Microsoft also made its intentions to complete its existing $40 billion share repurchase authorization by Dec. 31, 2016, the same timeframe as previously committed.