Given the value that enterprises and recruiters place in LinkedIn's data network, we think the use cases LinkedIn provides for Microsoft are multifold, as the firm can leverage its massive enterprise customer base to promote LinkedIn’s tools around hiring, marketing, and social selling. We will also maintain our wide moat and stable moat trend ratings for Microsoft, particularly because we also have a wide moat and stable moat trend ratings for LinkedIn. We are maintaining our $61 fair value estimate for Microsoft, and we think the company’s shares remain attractive at current levels. We think the data use case opportunities and fast-growing user base present unique opportunities for Microsoft’s enterprise initiatives, and we ultimately think this deal will unlock further growth for LinkedIn as it is weaved into Microsoft’s productivity suite. While the purchase price represents a premium to our $155 fair value estimate for LinkedIn, we believe it's a fair price given LinkedIn’s growing user base and large total addressable market, which LinkedIn tabulates at $115 billion. Rodney Nelson, Morningstar's equity analyst, explains the impact on Microsoft.īoth stocks, LinkedIn and Microsoft have wide-moat ratings and stable moat trends. If LinkedIn halts the deal, it will have to pay Microsoft a $725 million termination fee.In a colossal deal, Microsoft has entered into a definite agreement to purchase LinkedIn for $26.2 billion (or $196 per LinkedIn share), inclusive of cash acquired. Ultimately, according to the principals involved in the deal, it’s about giving professionals more tools to increase their productivity. It enhances Microsoft’s all-important presence on mobile, with an average of 15 million mobile profile views on LinkedIn daily.LinkedIn’s online learning platform,, could mesh around Microsoft's certification and education initiatives across its product lines.There has been some recent slippage here, however. ![]() In fact, the recruitment segment accounted for 2/3 of LinkedIn’s $3 billion in revenues for 2015. LinkedIn has a leading presence in job recruitment.LinkedIn can become a sales platform for Microsoft products such as Office, Bing, Windows and apps.LinkedIn will benefit from Microsoft’s leadership in cloud computing as well as its 1 million customers.This could make it a strong competitor to market leader Salesforce, who Microsoft was in merger talks with as recently as last year. It bolsters Microsoft’s Dynamics customer relationship management software segment.Microsoft takes a giant step into the social media space with access to LinkedIn’s 430 million-plus members.The merger offers both companies possible synergies into the consumer and professional markets: LinkedIn will remain an independent business unit of Microsoft, and LinkedIn’s CEO Jeff Weiner will report to Microsoft CEO Satya Nadella. The merger has been approved by the boards of both companies and now awaits the green light by regulators. According to Bloomberg, the offer values LinkedIn 91 times EBITDA. The per-share offer of $196 is nearly a 50% premium on LinkedIn’s closing price the day before the deal was announced. In a cash deal valued at $26.2 billion, Microsoft has agreed to purchase social media giant LinkedIn. Financial Services Groupħ Ways This Could Reshuffle the Tech Deck ![]()
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