A significant acquisition announcement from Microsoft this morning: The company says it's offering $1.2 billion for Fast Search & Transfer ASA, a publicly traded Norwegian company that offers specialized online search technology used by big companies.
The offer translates into a 42 percent premium over Fast's most recent closing share price, and Microsoft says investors representing 37 percent of Fast's shares have approved the deal in advance, as has Fast's board of directors. It's due to be completed in the second quarter of this year.
The companies are holding a telephone conference later this morning to discuss details. It's the second time in recent history that Microsoft has offered a substantial increase over the share price in a bid for a publicly traded company. But in that earlier case, the company's $6 billion aQuantive deal, the premium was significantly higher, about 85 percent.
Update, 6:45 a.m.: Jeff Raikes, the Microsoft Business Division president, e-mailed employees about the deal this morning, giving a clearer sense for how the company plans to use the technology. Excerpts:
I am very excited about the potential addition of FAST to Microsoft and the alignment of this move with our SharePoint strategy. ...
The acquisition of FAST would immediately position Microsoft as the enterprise search technology leader and as the only company that provides products that span the entire spectrum of customer needs. FAST's best-in-class technology will also enable innovations in related areas such as our portal, content management, and social networking infrastructure. ...
FAST's strong team and technology offer a great fit with Microsoft. In addition to the immediate benefits for the SharePoint team, there are exciting opportunities for collaboration with the Online Services Business in search and advertising. Many of FAST's customers are leading media, commerce and communications companies who offer opportunities to expand Microsoft's advertising platform presence.
Update, 7 a.m.: In a note to clients, Goldman Sachs analyst Sarah Friar estimated that the deal represents 5.5 percent of Microsoft's cash balance as of the end of December. Here's how she assesses the implications of the acquisition:
The acquisition of FAST bolsters Microsoft's positioning in the enterprise search market. We view this acquisition as a necessary next step to help Microsoft shore up its defenses against Google in the enterprise. Microsoft's strength is that it owns the entire back-end infrastructure and hence data in the enterprise, which may be more difficult for Google to access. We also believe that this acquisition highlights an increased focus on inorganic growth.Microsoft, Search, Norwegian, Financial, Corporate, News, Corporate News, Deals, Acquisition
Source:→ Todd Bishop's Microsoft Blog