Tuesday, 14 June 2016

Microsoft-LinkedIn deal for $26 billion in cash: The top facts to note!

It's official: Microsoft is buying out LinkedIn, the world's largest professional social network for $26 billion in all cash deal. Microsoft confirmed the news today, and according to the announcement Jeff Weiner, the current CEO will continue to hold the position. He will now report to Satya Nadella, the Microsoft CEO.
So what are the facts surrounding this deal, which is being seen as one of the biggest in technology history in recent time? We take a quick look.
LinkedIn's numbers
According to a press statement by Microsoft, LinkedIn has seen some strong growth. The professional social network has grown 19 per cent growth year over year (YOY) to more than 433 million members worldwide, has a 9 per cent growth YOY to more than 105 million unique visiting members per month, and saw a 49 per cent growth YOY to 60 percent mobile usage.
LinkedIn has seen 34 per cent growth YOY to more than 45 billion quarterly member page views, and close to 101 per cent growth YOY to more than 7 million active job listings.
Valuations
Microsoft is paying $196 for each share of LinkedIn, which as the Associated Press points out is a 50 per cent premium over the stock's closing price of $131.08 on Friday. Associated Press notes after the announcement, LinkedIn shares soared 47 per cent to $193.36 in morning trading on Monday. Microsoft shares however, slipped 3.9 percent to $49.48.
Deal approval
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.
How will Microsoft pay for the deal and other details?
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.
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.

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