Software giant, Microsoft has announced plans to acquire the largest professional social network, LinkedIn for $26.2 billion in an all-cash transaction. The deal values LinkedIn shares at $196 each, a considerable premium to the $131.09 they closed out last Friday’s trading session.
The deal marks the biggest overseen by Microsoft CEO Satya Nadella since he took the top position from Steve Ballmer more than 2 years ago. More than 430 million professionals use LinkedIn which makes money by offering premium services to those members and by selling subscription-based access to its database to recruitment companies.
Although, at the time of writing, Microsoft hadn’t made clear what role LinkedIn will play in its business, Bruce Voight, who leads technology and social media research at Softbank CIBC International, said he believed it would enable the company to bolster its social networking presence in a way that would help it to sell more enterprise solutions.
“Microsoft will be very keen to win more exposure for its SaaS (Software as a Service) products like Microsoft Office 365 and its Microsoft Dynamics enterprise resource planning and CRM solutions,” he explained.
The boards of both companies have unanimously approved the deal and Microsoft says it hopes to conclude the transaction later this year.
“Although Softbank CIBC International were never particularly enamored with LinkedIn, for the lucky few small investors who actually managed to get in at its $45 IPO price, today’s deal will be very pleasing indeed. However, those who bought into the hyperbole when the stock traded as high as $269 in February last year, will be nursing some pretty sobering losses,” said Voight.

About Softbank CIBC International:
Softbank CIBC International (SCIBCI) LLC was founded in Tokyo, in 2007. Since our inception, we have grown to become one of the leading institutions in providing North America and European investors’ with access to Asia’s high yielding emerging market opportunities. With retail operations located in Toronto, the provisional capital of Ontario, Canada and corporate headquarters in Tokyo, Japan, in the simplest possible terms, it is SCIBCI’s sole aim to generate consistent high returns on investment through our solid commitment to conscientious and assiduous research and analysis.