Microsoft acquires Skype and Canadians make over $500 Million on the deal

The BIG news today is that the rumoured purchase of Skype by Microsoft is complete. Analysis is pouring in on the acquisition including whether eBay ended up making money on their sometimes troubled five-year investment.

Om Malik's quick back of the envelope calculation indicates that eBay made a 40 percent profit on its Skype adventure. Here is how.

While the initial announced price for Skype was up to $4.1 billion, eBay paid about $2.6 billion for the company and another $530 million in earn-outs to the two founders. So in total it spent about $3.1 billion.

In November, eBay sold 70 percent of the company for $1.9 billion to various investors and the Skype co-founders. The company received about $2.5 billion from Microsoft for rest of its share of Skype. In total the company has received about $4.4 billion or just over 40 percent more than it paid.

But how did Canadians make out in the deal? 

You may remember that the Canada Pension Plan Investment Board invested in Skype in September 2009.

At the time the Canada Pension Plan's investing arm was among a group of buyers purchasing a 65% stake in the company for about $2 Billion. The CPPIB's contribution to the deal was about $300 million or 15%.

Based on the reported $8.5 Billion cash purchase price today, the CPPIB's stake in Skype is worth $828 million.

That's a $528 Million profit on a 20-month investment. Nice work CPPIB!