When the deal is closed, GitHub will operate independently and continue to remain as an open platform. Also, the San Francisco-based company will be led by CEO Nat Friedman, an open-source veteran, and its current CEO Chris Wanstrath will be a technical fellow at Microsoft.
The transaction, which is targeted to close by the end of 2018, is expected to have a minimal dilution of less than 1% to non-GAAP EPS in FY19 and FY20 and will add to operating income in 2020 on an adjusted basis. On closing, GitHub will be reported under Microsoft’s Intelligent Cloud division, which registered a 17.3% growth in the recently ended third quarter. Microsoft will use a portion of the remaining $30 billion of its current share repurchase authorization to buy GitHub.
Wall Street has welcomed CEO Satya Nadella’s strategic move as Microsoft stock reached its new 52-week high during today’s trading. However, there is an opinion that the price paid by Microsoft for GitHub is too high and some people are skeptical on how the tech giant is going to make the open-source platform generate revenue for it.