When Zendesk announced It had been acquired Friday by a consortium of private equity firms for $10.2 billion, which seemed like a sudden and shocking end for a company that once pioneered cloud customer service, especially as the organization had recently vowed to become independent. stay.
But there was a lot going on with Zendesk leading up to Friday’s announcement, including a battle with activist investor Jana Partners over a number of issues. For starters, the company turned down a $17 billion bid in February, which is significantly higher than the final sale price, and Jana wasn’t happy with that outcome.
At the time, however, Zendesk concluded that it was worth much more. A Marketingwithanoy analysis agreed. But the market has changed dramatically in recent months and the company’s value plummeted.
“It feels like something dramatic has to happen to change the trajectory they’ve been on over the past few years, and maybe this is it.” Brent Leary, Principal Analyst at CRM Essentials
As if that wasn’t enough, the company also sought to expand its offerings by buying Survey Monkey’s parent company Momentive for a $4.1 billion deal. That attempt was thwarted by investors led by Jana. Zendesk saw the acquisition as an opportunity to expand the platform into customer experience, with much faster revenue growth, but investors didn’t see a clear match and were dissatisfied with the cost.
Furthermore, Jana tried to take over board seats and pressured Zendesk to call a deferred annual meeting to bring attention to that particular issue.
The whole ordeal came to an end on Friday. We spoke to several industry analysts, who, given the events leading up to the sale, were for the most part not surprised by this ending. Most suggested it might bring some relief to the beleaguered company.