Zendesk confirms cut-price $10.2B buyout

Customer service software company Zendesk has announced it will be acquired for $10.2 billion by a group of investors led by private equity firm Hellman & Friedman and investment company Permira, as well as a wholly owned subsidiary of the Abu Dhabi Investment Authority and GIC, a sovereign wealth fund from Singapore.

The acquisition caps a tumultuous year for the California-based company and comes just two weeks after announcing that it would remain a “public, independent company.”

In February this year, Zendesk’s board of directors rejected an acquisition proposal of $17 billion from a consortium of private equity firms, saying that it “significantly undervalues” the company.

The final offer accepted by the Zendesk board this week was $77.50 per share, which represents a premium on the $54.53 the company was trading at earlier in the month, but which is still considerably less than $127-$132 per share offer that the board rejected in February.

Two weeks later, Zendesk announced it was also terminating its proposed $4.1 billion takeover of Momentive, the owners of SurveyMonkey, after stockholders rejected the deal.

On June 9, 2022, Zendesk released a statement saying that, despite meeting with 16 potential strategic partners and 10 financial sponsors, “no actionable proposals were submitted” due to “adverse market conditions and financing difficulties.”

In an acknowledgement that recent events might have left some shareholders unhappy, Carl Bass, lead independent director at Zendesk said in a statement that after an extensive review process and considerations of long-term market outlook, the board concluded that “this transaction was the best alternative” and voted unanimously to take the offer.