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Acquiror Target Deal Rationale/Commentary

WhatsApp provides a cross-platform mobile messaging application for smartphones that allows users to exchange messages on a data network bypassing carrier SMS charges. Deal Summary WhatsApp currently has more than 450 million monthly Date: 2/19/2014 active users (MAU), over 320 million daily active users (DAU) Transaction Value: $16B and adds more than 1 million new registered users per day. % Sought: 100% With the acquisition of WhatsApp, has now Consideration: Cash, Equity opened up a new channel to maintain their user growth rates by tapping into developing markets where mobile phones serve as the primary device to access the Internet.

This deal announcement comes only 5 days after Rakuten Valuation Metrics announced its acquisition of Viber Media for $900 million, a Trailing Revenue Multiple: NA value of nearly 600 times trailing revenues. Evan Spiegel’s Snapchat has notoriously rejected multi-billion offers from

Trailing EBITDA Multiple: NA the likes of Facebook and as it pursues a potential Multiple on $ Invested: 2,000x path toward IPO. Korean search giant Naver owns Line and Deal Value Per Employee: $320M Asia’s largest internet company Tencent owns WeChat, leaving KakaoTalk as a potential standalone messaging acquisition target following the recent consolidation. Investors The deal value of $16 billion consists of $4 billion in cash and Sequoia Capital approximately $12 billion worth of Facebook shares. Under the terms of the deal, WhatsApp founders and employees receive an additional $3 billion in restricted stock units which will vest over four years upon closing of the deal.

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