Acquisitions have failed and investors have spoken out.
Uncover how Zendesk can get back on track.
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Understanding the needs of customers and employees is essential in furthering your business. Addressing employee problems such as IT tickets as well as the issues of customers enabled Zendesk to become a highly valued helpdesk platform.
In fact, Zendesk receiveda $17 billion takeover bid in February from a consortium of private equity firms.
However, the board was unimpressed and stated in a blog post: “Consistent with its fiduciary obligations, after careful review and consideration conducted in consultation with its independent financial and legal advisors, the Board concluded that this non-binding proposal significantly undervalues the company and is not in the best interests of the company and its shareholders.”
While this decision not to sell undoubtedly showed confidence in the value of Zendesk, it caused issues. Notably, investment company Jana (which has a 2.5% stake in Zendesk) began making vocal complaints about a lack of meetings.
On top of that, Jana heavily criticized Zendesk’s plan to purchase Momentive.
Jana wrote publically: “The facts could not be more obvious to us: Zendesk, Inc.’s…proposed acquisition of Momentive Global Inc. lacks financial and strategic merit, introduces substantial execution risk and relies on highly questionable synergy and pro forma trading multiple assumptions, all while appearing to be ‘out of left field’ as the result of an impulsive process.”
Eventually, Zendesk withdrew from the acquisition and said in a blog post: “While we were excited by the potential of this transaction to transform the customer experience and create stockholder value, we respect and appreciate the perspectives of our stockholders.”
After the turbulence of early 2022, smoother roads may be around the corner for Zendesk.
Zendesk’s sale
Zendesk has now been purchased for $10.2 billion in an acquisitionled by Permira and Hellman & Friedman. Although this offer is significantly lower than the one that the company received last year, there are still positives from this deal.
Permira and Hellman & Friedman paid $77.50 per share, which is far greater than the $57.95 per share rate that was seen before the deal was sealed.
In addition, the HR tech market has seen an economic downturn with valuations sliding. in recent months and this partly explains the lower valuation.
Discussing the deal, Stephen Ensley, a partner at Hellman & Friedman, said: “We see tremendous value in Zendesk’s platform and ability to grow at scale.
“Its intuitive yet powerful offering serves over 100,000 companies, ranging from the smallest businesses to the largest enterprises.”
Zendesk co-founder and CEO, Mikkel Svane, shared his thoughts with TechCrunch: “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.
“With Hellman & Friedman and Permira’s 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.”
Many employees and clients will hope this deal means more settled times for Zendesk and that the company can go back to helping organizations address issues quickly and effectively.
