Ownership of Zendesk This week the saga has taken some new turns with an outside investor, Jana Partners. campaign against the companyreview of its strategic options is coming to an end, and the business software company decision to remain independent.
Now worth less than $10 billion Zendesk has made more noise in recent months than one would expect from a company of its size. But after announce to buy Momentive (SurveyMonkey) for over $4 billion last year Zendesk fierce fight with outside investors.
Even though Yana was not very fascinated with the SurveyMonkey deal (to put it mildly), Zendesk believed it was a way to drive revenue growth and push the company away from purely service desk tasks, and to a lesser extent customer relationship management or CRM, to customer experience market. Zendesk offered in presentation for investors that the deal could help it increase revenue from about $1.39 billion in November 2021 to $3.5 billion by 2024, which Zendesk stressed is ahead of schedule.
Whatever Zendesk was selling for Momentive, Jana wasn’t buying, and the tone of conversation between the company and its shareholder only grew tense over time. Zendesk went their own way, ignoring Jana’s increasingly stringent demands. spelled out companies and in public statements. Including this week threat of legal action if Zendesk is unable to immediately call a shareholder meeting.
Yana wants Zendesk to sell. Earlier this year Zendesk turned down a $17 billion offer to sell the company, which, as we wrote at the time, “pissed off” Yana. The offer came from a consortium of private equity firms, and it’s easy to see why founder and CEO Mikkel Svane, who built Zendesk from the ground up, didn’t want to go that route. Emotions aside TechCrunch analysis at the time it was concluded that the deal undervalued the company.
That Zendesk has found itself in a sell-off of sorts should come as no surprise. Over the past couple of years, we’ve seen several major corporate deals, including Broadcom’s recent announcement of buy VMware for $61 billion, which is still under implementation and subject to regulatory scrutiny. Prior to this, some major software deals that closed include Salesforce buys Slack almost $28 billion Oracle buys Cerner at the same price and Microsoft buys Nuance Communications for 19 billion dollars
It is worth noting that the above transactions took place in a different economic environment. Whether or not it’s justified, markets have retreated and venture dollars are getting tougher. Ratings are dropping everywhere. So it makes sense that even if Zendesk wants to sell itself, now is not the right time to do so.
The company agrees. Zendesk had a chance to take the money and run away, but they thought it was actually worth more than the offer – at least at the time. Is the $17 billion offer rejected earlier this year any more attractive in light of the continued decline in the value of tech companies? Certainly, but enough to call into question the decision to withdraw? Let’s find out.
Credit: techcrunch.com /