LinkedIn 2015 Annual Report Download - page 102
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outstanding shares of capital stock of Lynda.com consists of approximately $777.7 million in cash and
3,573,589 shares of LinkedIn Class A common stock. LinkedIn also issued 178,763 stock options
related to assumed Lynda.com equity awards. The fair value of the earned portion of assumed stock
options of $11.2 million is included in the purchase price, with the remaining fair value of $18.9 million
representing post-acquisition compensation expense that will be recognized over the requisite service
period of approximately three years from the date of acquisition. LinkedIn accelerated the vesting of
and settled in cash the stock options for non-continuing employees and recognized $22.4 million in
stock-based compensation expense immediately. A portion of the consideration was placed in escrow
to satisfy certain indemnification obligations of the former Lynda.com stockholders as described in the
Merger Agreement.
The following table presents the components of the preliminary purchase consideration transferred
based on the closing price of $194.49 per share of LinkedIn’s Class A common stock (in thousands):
Cash ............................................................. $ 777,745
Class A common stock ................................................ 695,028
Earned portion of the assumed stock options ................................ 11,181
Other consideration .................................................. 2,758
Purchase consideration .............................................. $1,486,712
The acquisition has been accounted for as a business combination under the acquisition method
and, accordingly, the total purchase price is allocated to the tangible and intangible assets acquired
and the liabilities assumed based on the fair value on the acquisition date. The fair value of assets
acquired and liabilities assumed from the acquisition of Lynda.com is based on a preliminary valuation
and, as such, the Company’s estimates and assumptions are subject to change within the
measurement period. The primary areas of the purchase price that are not yet finalized are related to
indirect taxes. The changes to the purchase price allocation primarily related to income taxes with the
largest change related to the early adoption of authoritative accounting guidance on deferred taxes.
The results of operations of Lynda.com are included in the consolidated financial statements from
the date of acquisition. The Company has recognized $107.4 million in revenue and net loss of
$82.9 million related to its acquisition of Lynda.com in 2015. The net loss related to Lynda.com
includes tax-effected one-time charges, such as severance, of approximately $19.4 million. The
Company also recognized transaction costs of approximately $2.0 million, which are included in general
and administrative expense in the consolidated statement of operations in 2015. The following table
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