Microsoft has acquired the professional social network LinkedIn Corp. in a deal worth $26.2 billion.
The deal is marked as the largest technology-industry deal on record.
Microsoft hopes to spin the same informational highway, but on a more professional level.
The CEO of Microsoft, Satya Nadella, has drawn praise for his efforts in reshaping the company and help it to reignite sales through all levels – the board however is urging the company to move even faster in an attempt to shift into software and services that are delivered over the internet.
Microsoft has agreed to pay $196 per share in an ‘all-cash’ transaction, inclusive of LinkedIn’s net cash, a 49.5% premium on the company’s closing price Friday.
Officials said that LinkedIn will retain its branding and independence with Jeff Weiner remaining as CEO of the company.
The acquisition is the largest ever for Microsoft as the company intends to focus on business customers with cloud-based services and productivity tools rather than regular customers.
Microsoft outlined their vision in which a person’s LinkedIn profile is part of their work life and will connect with Windows, Outlook, Excel, PowerPoint, Skype and other Microsoft products.
Outside sources say that Microsoft will build LinkedIn into the largest global professional network in just a few years. The company will most likely push software systems for salespeople, a system currently dominated by Salesforce.com Inc.
LinkedIn shares surged 47% to $192.56 on the New York exchange – Microsoft stock fell 2.1% to $50.40 – Twitter jumped up 9.1% amid speculation that it could be in play as well.
The $26.2 billion (USD) deal values LinkedIn at about 91 times its earnings before interest, taxes, depreciation and amortization – this according to Bloomberg.
LinkedIn has long been valued for having the potential viral growth of a social network – the company has redesigned its suite of mobile applications – combining with Microsoft would give LinkedIn a boost in membership, making it more useful if people share updates more frequently.
Microsoft started talks with LinkedIn in January, just before a lower-than-expected revenue forecast which caused its stock to fall more than 40% in a single day.