That $1B for Instagram? It’s 23M Shares of Facebook + $300M in Cash (And a $200M Termination Fee)
Here is a relevant and juicy new detail about Facebook’s acquisition of photo-sharing start-up Instagram, which is buried deep in the new S-1 document the social networking giant just filed:
In April 2012, we entered into an agreement to acquire Instagram, Inc., which has built a mobile phone-based photo-sharing service, for approximately 23 million shares of our common stock and $300 million in cash. Following the closing of this acquisition, we plan to maintain Instagram’s products as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing. This acquisition is subject to customary closing conditions, including the expiration or early termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (HSR), and is currently expected to close in the second quarter of 2012. We have agreed to pay Instagram a $200 million termination fee if governmental authorities permanently enjoin or otherwise prevent the completion of the merger or if either party terminates the agreement after December 10, 2012.
That means in the deal, Facebook is valuing its share price at just under $31 a share or $77 billion for the whole tamale.