A syndicate of buyout companies led by Hellman & Friedman and Permira agreed to acquire software manufacturer Zendesk Inc. for around $9.5 billion.
According to a statement released by the firm on Friday, the all-cash deal gives stockholders $77.50 per share, a premium of 34% over Zendesk’s closing stock price on Thursday. On the back of the announcement, the stock increased by roughly 29% to $74.75. The whole acquisition value, including debt, comes to around $10.2 billion. After failing to locate a possible buyer earlier this month, Zendesk announced that it will remain independent.
After conducting a strategic evaluation that included reaching out to 16 possible strategic partners and 10 financial sponsors, the San Francisco-based firm announced on June 9 that it will no longer attempt to sell itself. Final bidders claimed “unfavourable market conditions and funding issues at the conclusion of the process,” according to a statement from Zendesk, and “no actionable bids were received.”
Unsolicited acquisition proposals were made to Zendesk in February by buyout companies, who valued the company at between $127 and $132 per share. According to Bloomberg, these companies included Hellman & Friedman, Advent International, and Permira. Few weeks later, Zendesk abandoned its attempt to acquire SurveyMonkey’s parent company, Momentive Global Inc., claiming it was unable to secure the required approval from its shareholders to complete the transaction.
In an all-stock deal valued at almost $4 billion at the time, Zendesk and Momentive had agreed to a purchase in October. Investor opposition to the merger led to a major sell-off in both firms following the acquisition. Shareholder of Zendesk Janus Henderson Group Plc spoke out against the purchase, and activist investor Jana Partners encouraged shareholders to vote against it as well.
Customer care software maker Zendesk has previously stated that it will benefit from Momentive’s market research offerings. Since the purchase was announced on October 28 and until Thursday, the shares had decreased by 51%.
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