Software-as-a-service company Zendesk, Inc. (NYSE: ZEN) will be acquired by an investment group led by firms Permira and Hellman & Friedman LLC in a deal that will take Zendesk private.
The June 24 deal values Zendesk at approximately $10.2 billion. Pursuant to the deal, its shareholders will receive $77.50 in cash per share, which represents a 34% premium over Zendesk’s closing stock price on June 23, the day before the deal was announced.
“This is the start of a new chapter for Zendesk with partners that are aligned with the strength of our agile products and talented team, and are committed to providing the resources and expertise to continue our growth trajectory,” Mikkel Svane, founder, chairman and CEO of Zendesk, said in a press release. “With Hellman & Friedman and Permiras support, we’ll continue to execute on our long-term strategy with our customers as our top priority, taking full advantage of the opportunity we see to help businesses navigate the ever-changing expectations and demands of their customers.”
“The Board conducted an extensive strategic review over a three-month period, receiving an actionable offer from Hellman & Friedman and Permira after the termination of our formal process,” Carl Bass, lead independent director of Zendesk, said in a press release. “This transaction provides certainty of value for our shareholders at a significant premium to Zendesk’s trading price.”
According to the filings, the investor group also includes a wholly-owned subsidiary of the Abu Dhabi Investment Authority and GIC.
“Zendesk has reimagined customer service software and empowers businesses to transform how they communicate with their customers in an increasingly digital world,” Ryan Lanpher, Partner at Permira, said in a press release. “We believe Zendesk is uniquely positioned to enable meaningful interactions and deliver compelling business outcomes across any channel.”
“Over the past 15 years, Zendesk has revolutionized how companies serve their customers and has become a leading platform within the customer experience ecosystem,” Tarim Wasim, Partner at Hellman & Friedman, said in a press release. “We deeply believe in the company’s growth opportunity as it continues to help businesses across the world delight their customers.”
The transaction has been unanimously approved by Zendesk’s board of directors. It is expected to close in Q4 2022 and is subject to customary closing conditions and shareholder approval.
Permira and Hellman & Friedman have prepared debt and equity financing commitments to finance the transaction, according to the filings.
Upon consummation, Zendesk will operate as a privately-held company and will not be on the NYSE.
Zendesk’s financial advisors are Qatalyst Partners and Goldman Sachs & Co. LLC and its legal advisor is Wachtell, Lipton, Rosen & Katz.
The investor group’s financial advisor is Morgan Stanley & Co. and its financing counsel is Simpson Thacher & Bartlett LLP. Permira’s M&A counsel is Fried, Frank, Harris, Shriver & Jacobsen LLP. Hellman & Friedman’s legal counsel is Kirkland & Ellis LLP.
Prior to the announcement, Zendesk’s stock was valued at $57.95 on June 23. When the deal was announced on June 24, stock closed at $74.17. A few days later on June 28, stock closed at $74.41.
This transaction comes after Zendesk’s proposed acquisition of SurveyMonkey parent company Momentive was canceled in February after failing to get shareholder approval.