Zendesk (ZEN) Confirms Completion Of Strategic Review, to Execute Strategic Plan as Independent, Public Company

(Updated - June 9, 2022 8:33 AM EDT)

Zendesk, Inc. (NYSE: ZEN) today announced that its Board of Directors has conducted and completed a comprehensive review of strategic alternatives aimed at enhancing stockholder value. After a thorough process conducted with the assistance of its financial advisors at Qatalyst Partners and Goldman Sachs & Co and its legal advisors at Wachtell, Lipton, Rosen & Katz, which included soliciting interest from a wide range of potential strategic partners and financial sponsors regarding a potential sale of the Company, the Board has unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company is in the best interest of the Company and its stockholders at this time.

The Strategic Review Process

As part of the strategic review process, the Board directed the Company’s financial advisors to identify potential strategic partners and financial sponsors that might be interested in an acquisition of or strategic combination with the Company. At the direction of the Board, Zendesk’s financial advisors conducted a comprehensive outreach to 26 potential counterparties, including 16 potential strategic partners and 10 financial sponsors, including a group of investors who had previously expressed conditional interest in acquiring the Company. Over the course of several months, the Company engaged in management meetings and an extensive due diligence process with four potential strategic partners and six financial sponsors. Ultimately, only a subset of the financial sponsors, and none of the potential strategic counterparties, chose to continue in the process. Despite the Company extending the process several times to provide interested financial sponsors additional time and access to attempt to secure sufficient financing, no actionable proposals were submitted, with the final bidders citing adverse market conditions and financing difficulties at the end of the process.

The Path Forward

Zendesk has a history of delivering value for stockholders, including a compounded 40% revenue CAGR since its IPO, driven by attractive revenue growth at significant scale with improving operating leverage, profitability and cash flow. As Zendesk moves forward with its standalone strategy, it remains fully committed to executing on its strategic plan and delivering on its long-term growth and profitability goals.

Zendesk’s mission is to simplify the complexity of business and make it easy for companies and customers to create connections. In pursuit of that mission, it will continue to pursue a compelling strategy that includes:

leveraging the world’s most recognized brand in customer service to further accelerate Zendesk’s growth in the enterprise, the success of which is demonstrated by its substantial growth in customers with over $250,000 in ARR, which represented 39% of total ARR as of the first quarter of 2022;
reinforcing its leadership in the transformative market of Conversational CRM, enabling businesses to meet and exceed the ever-increasing demands of its customers for instant, contextual and convenient service on their terms; and
unlocking the power of billions of customer interactions to create additional value for businesses by empowering them with rich, multi-dimensional customer intelligence capabilities and insights.

“The Board and management team are committed to driving stockholder value, and we are grateful to our employees, customers, partners and investors for standing with us during this period,” said Mikkel Svane, Founder, Chairman and CEO, Zendesk. “In response to investor input and our own self-assessments following the termination of our proposed acquisition of Momentive, our Board decided it was in the best interest of our stockholders to assess all opportunities to enhance stockholder value. The process did not yield any actionable options for Zendesk, and our Board unanimously determined that the right path to sustainably grow stockholder value lies in advancing Zendesk as an independent business. In addition, the Board and management believed that it was imperative for Zendesk to make this announcement to be transparent with our employees, customers, partners and investors regarding the execution and outcome of the strategic review, given the significant market speculation over the past several months. Our business is built on a strong foundation of delivering products that make it easier for businesses and customers to create better relationships. We remain as committed as ever to this and to serving all of our stakeholders.”

2022 Annual Meeting Date Announced

Zendesk’s Board deferred setting the date for its 2022 Annual Meeting of Stockholders to allow sufficient time for the conclusion of the comprehensive strategic review. With the review completed, Zendesk’s 2022 Annual Meeting of Stockholders will now take place on August 17, 2022. More information, including detailed information on the Board’s nominees for election to the Company’s Board of Directors, will be provided in Zendesk’s preliminary proxy statement, which the Company expects to file in the near future.

You May Also Be Interested In

• Nordstrom (JWN) CEO Erik Nordstrom Reports 7.45% Stake, Seeks to Finance Potential Deal with Debt/Equity
• 23andMe (ME) announces CEO’s intention to pursue a potential take-private
• New York Community Bancorp (NYCB) Appoints Craig Gifford as CFO