Microsoft has acquired GitHub for $7.5B in stock

Microsoft has confirmed the acquisition of Github, this comes after almost a week of rumours and speculations. Bloomberg reported that the software giant has agreed to acquire GitHub, and that the company chose Microsoft partly because of CEO Satya Nadella. Business Insider first reported that Microsoft had been in talks with GitHub recently.

GitHub is a vast code repository that has become popular with developers and companies hosting their projects, documentation, and code. Apple, Amazon, Google, and many other big tech companies use GitHub. Microsoft is the top contributor to the site and has more than 1,000 employees actively pushing code to repositories on GitHub. Microsoft even hosts its own original Windows File Manager source code on GitHub.

GitHub raised $350 million and we know that the company was valued at about $2 billion in 2015.  The San-Francisco based company has now sold to Microsoft in what looks like a Lucrative deal considering they are selling at a price more than 3 time their valuation in 2015. Also putting into thought the potential value of the Microsoft stock which is at an all time high, in a few years this deal could be worth over $10 B.

GitHub, which hosts 27 million software developers working on 80 million repositories of code. Despite its popularity with enterprise users, individual developers and open source projects, they have  never turned a profit and even made significant loss  of  $66 million over three quarters in 2016. Therefore,chances are that the company decided that an acquisition was preferable over trying to IPO.

Microsoft which is valued at $507 Billion has been rapidly investing in open source technology since Satya Nadella took over the CEO role.  Microsoft has open sourced PowerShellVisual Studio Code, and the Microsoft Edge JavaScript engine. Microsoft also partnered with Canonical to bring Ubuntu to Windows 10, and acquired Xamarin to assist with mobile app development. Microsoft’s Visual Studio Code, which lets developers build and debug web and cloud applications, has soared in popularity with developers and GitHub acquisition will likely mean we’ll start to see even closer integration between Microsoft’s developer tools and the service.

Nadella in his prepared remarks stressed Microsoft’s heritage as a developer-centric company “We recognize the responsibility we take on with this agreement,” he said. “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 develop a feedback and invest in both fundamentals as well as new capability once the acquisition closes.”