Two weeks after saying that it would remain a public company, customer software-as-a-service (SaaS) vendor Zendesk announced it will be acquired for $10.2 billion by a consortium of private investors. Private equity firm Hellman & Friedman, investment company Permira, and a wholly-owned subsidiary of the Abu Dhabi Investment Authority are the lead firms in the group.
The announcement comes after Zendesk expressed intentions in early June to remain an independent public company following a strategic review.
"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," Co-Founder and Chief Executive Officer Mikkel Svane said in the announcement of the sale, a quick turnaround from the company’s previous position.
The offer is to acquire shares at $77.50 each, a premium on the $54.53 at which the company's stock traded on June 16, but below the $110-plus share price for most of 2021 and 2022.
Zendesk posted operating losses in both of those years, leading to price drops, which sparked the review and inspired buyers to emerge.
With the acquisition, investors will get some return on their investment. “The Board concluded that this transaction was the best alternative, and the Board voted unanimously to support this transaction,” independent Board Director Carl Bass said in the announcement.
Stephen Ensley, a partner at Hellman & Friedman, said in a statement that his firm believes Zendesk has potential with a large customer base. “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.”
The deal is expected to close in the fourth quarter.