Facebook has reached a definitive agreement to acquire cross-platform mobile messaging company WhatsApp for a total of about $16-billion.
The purchase price includes $4-billion in cash and about $12-billion worth of Facebook shares.
The agreement also provides for an additional $3-billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.
WhatsApp has built a leading and rapidly growing realtime mobile messaging service, with more than 450-million people using the service each month – and registering about 1-million new users every day.
At least 70% of WhatsApp users are active on a given day, generating messaging volume that approaches the entire global telecom SMS volume.
The acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.
“WhatsApp is on a path to connect 1-billion people. The services that reach that milestone are all incredibly valuable,” says Mark Zuckerberg, Facebook founder and CEO. “I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.”
Jan Koum, WhatsApp co-founder and CEO, comments: “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, California; Koum will join Facebook’s board of directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.
Upon closing of the deal, all outstanding shares of WhatsApp capital stock and options to purchase WhatsApp capital stock will be cancelled in exchange for $4-billion in cash and 183 865 778 shares of Facebook Class A common stock (worth $12-billion based on the average closing price of the six trading days preceding 18 February 2014 of $65,2650 per share).
In addition, upon closing, Facebook will grant 45 966 444 restricted stock units to WhatsApp employees (worth $3-billion based on the average closing price of the six trading days preceding 18 February 2014 of $65,2650 per share).