Wired News – Microsoft Acquires GitHub

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LONDON, UK / ACCESSWIRE / June 7, 2018 / If you want access to our free research report on Microsoft Corp. (NASDAQ: MSFT), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MSFT as the Company’s latest news hit the wire. On June 04, 2018, the Company declared that it has signed an agreement to acquire the leading software development platform, GitHub. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Developers at the Center of Digital Transformation

Nowadays, every Company is becoming a software Company and developers are at the center of digital transformation. They are increasingly driving business processes and functions across organizations from customer service and HR to marketing and IT. Hence, their decisions impact value creation as well as growth across industries.

GitHub is the world’s most popular destination for open source projects and software innovation. On this platform, over 28 million developers learn, share, and collaborate to create the future. In fact, it hosts developers from almost every country, representing Companies across the healthcare, manufacturing, technology, financial services, retail, and other industries.

Acquisition Would Enable Superior Offerings for Developers

Through this acquisition, the Companies intend to empower developers to perform better at every stage of the development lifecycle, encourage the enterprise use of GitHub, and make Microsoft’s developer tools and services accessible to new audiences. After acquisition, GitHub will retain its developer-first spirit and operate independently to provide an open platform for all developers in all industries. Therefore, developers will still be able to use the programming languages, tools, and operating systems as per their requirement for projects. Besides, they will also be able to deploy their code to any operating system, any cloud, or any device of their choice.

Satya Nadella, Chief Executive Officer (CEO) at Microsoft, believes that the GitHub acquisition will help Microsoft strengthen its commitment to developer freedom, openness, and innovation. Microsoft, being a developer-first Company, works to empower every developer to build, innovate, and solve the world’s most pressing challenges.

Chris Wanstrath also expressed his pleasure on joining forces with Microsoft to help enhance the future of software development. Microsoft’s focus on developers and its scale, tools, and global cloud will play an important role in making GitHub more valuable for developers everywhere.

Terms and Conditions of the Agreement

Microsoft has agreed to acquire GitHub for $7.50 billion in Microsoft stock. At present, the agreement is subject to customary closing conditions and the completion of regulatory review. Post which, it is expected to close by the end of the current calendar year.

Roles and Responsibilities

Post the acquisition, Nat Friedman, Corporate Vice President of Microsoft, as well as Founder of Xamarin and an open source veteran, will take up the role of CEO at GitHub. On the other hand, GitHub’s existing CEO, Chris Wanstrath, will become a Microsoft technical fellow. In his new role, Wanstrath will work on strategic software initiatives and report to the Executive Vice President, Scott Guthrie.

Financial Implications

After the acquisition, GitHub’s financials will be reported as a part of Microsoft’s Intelligent Cloud segment.
Microsoft expects the acquisition to be accretive to its operating income on a non-GAAP basis in FY20. Also, the acquisition will have a minimal dilution of less than 1% to earnings per share on a non-GAAP basis in FY19 and FY20, based on the expected close time frame. Non-GAAP excludes expected impact of purchase accounting adjustments, and integration and transaction-related expenses.
Microsoft is planning an incremental share buyback beyond its usual quarterly pace to offset stock consideration paid within six months after closing. Moreover, the Company intends to utilize a part of the remaining share repurchase authorization of $30 billion for the purchase.

Stock Performance Snapshot

June 06, 2018 – At Wednesday’s closing bell, Microsoft’s stock was marginally up 0.29%, ending the trading session at $102.49.

Volume traded for the day: 21.09 million shares.

Stock performance in the last month – up 6.52%; previous three-month period – up 9.19%; past twelve-month period – up 41.33%; and year-to-date – up 19.82%

After yesterday’s close, Microsoft’s market cap was at $788.97 billion.

Price to Earnings (P/E) ratio was at 28.45.

The stock has a dividend yield of 1.64%.

The stock is part of the Technology sector, categorized under the Business Software & Services industry. This sector was up 0.5% at the end of the session.

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