Zendesk agrees to go private for $10.2 billion
Buyout firms Hellman & Friedman and Permira this morning announced a $10.2 billion deal to buy Zendesk, a San Francisco-based customer engagement software provider that's been under pressure from activist investor Jana Partners.
The big picture: Silicon Valley is full of stories about companies that boldly reject takeover offers, only to see their values subsequently skyrocket. This isn't one of them.
Timeline: In February, Zendesk turns down around a $17 billion take-private proposal from a group that included both H&F and Permira. Soon after, its shareholders rebuff Zendesk's own $4.1 billion takeover bid for SurveyMonkey parent company Momentive (Nasdaq: MNTV).
- In April, Zendesk hires Qatalyst Partners to explore a sale.
- In early June, Zendesk says the sale process hasn't borne fruit. Subsequent reports are that the company and Jana are talking truce, which would include the departure of founding CEO Mikkel Svane.
- It closes trading yesterday with a market cap of $7.1 billion — less than half what it turned down just four months ago.
This morning: Shares surged more than 50% in premarket trading, following multiple reports that a deal was near. But the actual takeover price of $77.50 per share is only a 34% premium on yesterday's close, meaning that speculators got ahead of themselves.
- It's also not a great outcome for Jana. $77.50 is well below where Zendesk traded during all of Q1, which is when Jana boosted its stake to around 2.5%.
The bottom line: The best things don't always come to those who wait.