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Microsoft acquiring GitHub in a deal of $7.5 billion
Published : June 2018

The Microsoft Corporation on Monday announced that it has made an agreement for acquiring GitHub, a leading platform aiding software developers. Here, more than 28 million developers share, collaborate and learn to create new-age technologies together. The acquisition will result in the two companies empowering the developers and pushing them towards better achievement at every stage of the development cycle, encourage adoption of GitHub by major enterprises, and employ Microsoft developer’s services and tools to benefit developers from all spheres.


Satya Nadella, CEO of Microsoft said that Microsoft is the first developer company and by joining hands with the GitHub, it aims to strengthen the commitment to the developer’s openness, innovation, and freedom. He further added that the company recognizes the community responsibility and would do their best to empower every developer and to motivate them to innovate, solve and build solutions to combat the pressing global challenges.


Under the agreement terms, Microsoft will acquire GitHub for $7.5 billion in the Microsoft stock. Subjected to various customary closing conditions, the acquisition is mostly expected to close by the end of this calendar year. GitHub will continue to operate independently and retain its developer first ethos by providing an open platform for the developers in all the industries. The developers will continue to use the programming tools, languages and operating systems of the project of their choice. The developers will now be able to deploy their operating system code to any cloud, operating system, or any other device.


Corporate Vice President of Microsoft, Nat Friedman, who is also the founder of Xamarin will now assume the role of GitHub CEO. The current CEO of GitHub, Chris Wanstrath will become the technical fellow of Microsoft. Wanstrath also said that he is extremely proud of the accomplishments of the GitHub community over the past decade. He cannot just hold his excitement to see what lies ahead. He further added that he sees a bright future in software development and is very much thrilled to join hands with Microsoft.


Today, most of the companies are transforming themselves into a software company. These companies are right at the center of the digital transformation. They are driving the business functions and processes across various organizations from HR and customer service to IT and marketing. The choices that these developers will make would increasingly determine the growth and value creation across all the industries. GitHub is now the perfect home for millions of modern developers and is also one of the popular destinations for software innovation and open source projects. The platform even holds a host of growing network of developers from almost every country, representing 1.5 million companies, and above which includes sectors like manufacturing, healthcare, financial services, retail, technology and more.


Once the deal closes, Microsoft mainly expects that GitHub’s financials will be reported as a part of the Intelligent Cloud segment. It also expects that this acquisition will be accretive to the operating income in the fiscal year 2020 on the non-GAAP basis. The non-GAAP excludes the expected impact on the purchase accounting adjustments as well as all the transaction related and integration related expenses. An incremental share buyback is expected to offset the stock consideration that paid within the six months of closing. Microsoft is planning to use the remaining portion of $30 billion of its present share repurchase authorization for making the purchase.


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