From left: Chris Wanstrath, Github CEO and co-founder; Satya Nadella, Microsoft CEO; and Nat Friedman, Microsoft corporate vice president, Developer Services.
Microsoft to acquire GitHub for $7.5 billion
Acquisition will empower developers, accelerate GitHub’s growth and advance Microsoft services with new audiences.
REDMOND, Wash. — June 4, 2018 — Microsoft Corp. on Monday announced it has reached an agreement to acquire GitHub, the world’s leading software development platform where more than 28 million developers learn, share and collaborate to create the future. Together, the two companies will empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft’s developer tools and services to new audiences.
“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation,” said Satya Nadella, CEO, Microsoft. “We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.”
Under the terms of the agreement, Microsoft will acquire GitHub for $7.5 billion in Microsoft stock. Subject to customary closing conditions and completion of regulatory review, the acquisition is expected to close by the end of the calendar year.
GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects — and will still be able to deploy their code to any operating system, any cloud and any device.
Microsoft Corporate Vice President Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub CEO. GitHub’s current CEO, Chris Wanstrath, will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives.
“I’m extremely proud of what GitHub and our community have accomplished over the past decade, and I can’t wait to see what lies ahead. The future of software development is bright, and I’m thrilled to be joining forces with Microsoft to help make it a reality,” Wanstrath said. “Their focus on developers lines up perfectly with our own, and their scale, tools and global cloud will play a huge role in making GitHub even more valuable for developers everywhere.”
Today, every company is becoming a software company and developers are at the center of digital transformation; they drive business processes and functions across organizations from customer service and HR to marketing and IT. And the choices these developers make will increasingly determine value creation and growth across every industry. GitHub is home for modern developers and the world’s most popular destination for open source projects and software innovation. The platform hosts a growing network of developers in nearly every country representing more than 1.5 million companies across healthcare, manufacturing, technology, financial services, retail and more.
Upon closing, Microsoft expects GitHub’s financials to be reported as part of the Intelligent Cloud segment. Microsoft expects the acquisition will be accretive to operating income in fiscal year 2020 on a non-GAAP basis, and to have minimal dilution of less than 1 percent to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame. Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses. An incremental share buyback, beyond Microsoft’s recent historical quarterly pace, is expected to offset stock consideration paid within six months after closing. Microsoft will use a portion of the remaining ~$30 billion of its current share repurchase authorization for the purchase.
Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Morgan Stanley is acting as exclusive financial advisor to GitHub, while Fenwick & West LLP is acting as its legal advisor.
Media & Analyst Conference Call
Nadella, Friedman, Wanstrath and Microsoft Chief Financial Officer Amy Hood will host a joint conference call for media today, June 4, 2018, at 7 a.m. Pacific/10 a.m. Eastern to discuss this transaction. The call will be available to international callers at +1 (201) 689-8023 (no password required), to U.S. callers at (877) 407-0666 (no password required), or via webcast at https://edge.media-server.com/m6/p/eudfciq3 at that time. More information is available on http://news.microsoft.com.
Additional details will be available when the acquisition closes.
GitHub is the developer company. We make it easier for developers to be developers: to work together, to solve challenging problems, to create the world’s most important technologies. We foster a collaborative community that can come together — as individuals and in teams — to create the future of software and make a difference in the world.
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.
From Microsoft Blog:
Microsoft + GitHub = Empowering Developers.
Today, we announced an agreement to acquire GitHub, the world’s leading software development platform. I want to share what this acquisition will mean for our industry and for developers.
The era of the intelligent cloud and intelligent edge is upon us. Computing is becoming embedded in the world, with every part of our daily life and work and every aspect of our society and economy being transformed by digital technology.
Developers are the builders of this new era, writing the world’s code. And GitHub is their home.
As every industry – from precision medicine to precision agriculture, from personalized education to personalized banking – is being impacted by technology, the developer community will only grow in numbers and importance. Developer workflows will drive and influence business processes and functions across the organization – from marketing, sales and service, to IT and HR. And value creation and growth across every industry will increasingly be determined by the choices developers make.
In short, developers will be at the center of solving the world’s most pressing challenges. However, the real power comes when every developer can create together, collaborate, share code and build on each other’s work. In all walks of life, we see the power of communities, and this is true for software development and developers.
That is why we are so excited about today’s announcement. More than 28 million developers already collaborate on GitHub, and it is home to more than 85 million code repositories used by people in nearly every country. From the largest corporations to the smallest startups, GitHub is the destination for developers to learn, share and work together to create software. It’s a destination for Microsoft too. We are the most active organization on GitHub, with more than 2 million “commits,” or updates, made to projects.
Microsoft has been a developer-focused company from the very first product we created to the platforms and tools we offer today. Building technology so that others can build technology is core to our mission to empower every person and every organization on the planet to achieve more.
Chris Wanstrath (left), Github CEO and co-founder; Nat Friedman, Microsoft corporate vice president, Developer Services; Satya Nadella, Microsoft CEO; and Amy Hood, Microsoft Chief Financial Officer.
Microsoft is also committed to empowering communities, from the world’s professionals to IT professionals to gamers. We believe in the power of communities to achieve much more than what their members can do on their own. It’s our ability to work together that helps our dreams become reality, and we are dedicated to cultivating and growing communities to do just that.
And Microsoft is all-in on open source. We have been on a journey with open source, and today we are active in the open source ecosystem, we contribute to open source projects, and some of our most vibrant developer tools and frameworks are open source. When it comes to our commitment to open source, judge us by the actions we have taken in the recent past, our actions today, and in the future.
Given all of this, together with GitHub, we see three clear opportunities ahead.
First, we will empower developers at every stage of the development lifecycle – from ideation to collaboration to deployment to the cloud. Going forward, GitHub will remain an open platform, which any developer can plug into and extend. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects – and will still be able to deploy their code on any cloud and any device.
Second, we will accelerate enterprise developers’ use of GitHub, with our direct sales and partner channels and access to Microsoft’s global cloud infrastructure and services.
Finally, we will bring Microsoft’s developer tools and services to new audiences.
Most importantly, we recognize the responsibility we take on with this agreement. We are committed to being stewards of the GitHub community, which will retain its developer-first ethos, operate independently and remain an open platform. We will always listen to developer feedback and invest in both fundamentals and new capabilities.
Once the acquisition closes later this year, GitHub will be led by CEO Nat Friedman, an open source veteran and founder of Xamarin, who will continue to report to Microsoft Cloud + AI Group Executive Vice President Scott Guthrie; GitHub CEO and Co-Founder Chris Wanstrath will be a technical fellow at Microsoft, also reporting to Scott. You can see how Chris, Nat and I envision the opportunity ahead in this public presentation.
Together we will continue to advance GitHub as a platform loved by developers and trusted by organizations.