LinkedIn set to buy online educational firm Lynda. com
LinkedIn Corp. agreed to acquire online education business Lynda. com Inc. in a deal valued at $ 1.5 billion US, continuing the professionalnetworking service’s expansion beyond its roots.
The transaction will be 52 per cent in cash and the rest in stock, LinkedIn said Thursday in a statement. The deal is expected to close this quarter, the companies said.
Lynda. com, based in Carpinteria, Calif., offers more than 5,700 courses and 255,000 video tutorials for professional development. The company sells to individuals and large corporate customers.
Jeff Weiner, LinkedIn’s chief executive, has been expanding the company beyond its roots as a portal for recruiters and job seekers. To attract users more often, the company has bolstered content publishing, including contributions from such people as Google chairman Eric Schmidt, personalfinance commentator Suze Orman and Arianna Huffington, the founder of the Huffington Post.
Lynda. com’s courses “make it possible for anybody to easily and effectively acquire a skill needed to get their first job, get a promotion, land a business deal or advance their career,” Weiner said in a blog post Thursday.
James Cakmak, an analyst at Monness, Crespi, Hardt & Co., said the deal should boost LinkedIn’s revenue by 3 per cent to 5 per cent this year.
“Lynda. com offers LinkedIn a trusted entry into the education space,” said Cakmak, who has a buy rating on the networking site’s stock. “It’s really about making sure their professional community has the tools to achieve what they want. That’s the near- term. I think the longer- term is greater penetration into educational institutions.”
LinkedIn’s shares had gained 9.8 per cent this year through Wednesday.
Sales increased across all three of LinkedIn’s business segments in the fourth quarter. Revenue from its core service, which helps recruiters and companies find job candidates, gained 41 per cent to $ 369 million. Sales in Marketing Solutions, offering tools for advertisers, rose 56 per cent to $ 153 million. Revenue for the premium-subscription segment rose 38 per cent to $ 121 million.
Lynda. com was founded in 1995 by Lynda Weinman, a web graphics and design veteran, and her husband, illustrator-designer Bruce Heavin. The company raised $ 186 million in January in a funding round led by TPG Capital. Investors including Spectrum Equity, Accel Partners and Meritech Capital Partners also participated in the funding.
“Lynda. com’s business model meshes well with LinkedIn’s broad strategy and focus on job training, hiring, development and job skills,” analysts at RBC Capital Markets wrote in a note to clients.