Zendesk expects the combination to be growth accretive in its first full operating year and accelerate Zendesk’s revenue plan to $3.5 billion in 2024, one year ahead of its previous target.
Zendesk and Momentive have entered into a definitive agreement under which Zendesk will acquire Momentive, including its iconic SurveyMonkey platform. The terms of the transaction provide for Momentive stockholders to receive 0.225 shares of Zendesk stock for each share of Momentive stock, a ratio which represents an implied value of approximately $28 per outstanding share of Momentive stock based on the 15-day volume-weighted average price of Zendesk common stock up to and including October 26, 2021.
Zendesk expects the combination to be growth accretive in its first full operating year and accelerate Zendesk’s revenue plan to $3.5 billion in 2024, one year ahead of its previous target. The companies’ respective sizable customer bases and complementary capabilities are expected to provide significant opportunity for joint product adoption and increasing Momentive’s enterprise traction. Zendesk will reinvest savings from scale efficiencies into compelling growth opportunities to support the combination. Upon the close of the transaction, Momentive CEO Zander Lurie will continue to lead Momentive’s strong management team.
“The SurveyMonkey brand is iconic and we’ve admired their business from afar since the inception of Zendesk. They truly democratized an industry—almost everyone in the world has responded to one of their surveys at some point,” said Mikkel Svane, CEO & Founder, Zendesk. “We’re very excited to have them join the Zendesk mission along with Momentive’s market research and insights products and together create a powerful new Customer Intelligence company. We will deliver a rich, colorful picture of every customer so businesses really understand their customers and can build more authentic relationships.”
“We look forward to combining with Zendesk to advance our mission and accelerate our long-term growth strategy,” said Zander Lurie, CEO, Momentive. “This is a testament to the strength of our agile products and talented team. Zendesk and Momentive share a culture centered around our people, our communities and the customers we serve. The synergies between our companies are proximate and compelling. We are uniquely positioned to make Customer Intelligence a reality while delivering significant value for our shareholders.”
Acquisition to Create Powerful New Customer Intelligence Company
In today’s digital-first economy, it is imperative to build more meaningful relationships with customers. Meaning comes from a deep understanding of the customer and their experiences. Although businesses often have an endless supply of data, they lack actionable and personalized customer intelligence. Instead, businesses are left with a picture of the customer that is one dimensional, impersonal and incomplete.
Zendesk pioneered the ability to respond to what customers say and do, making it easier to deliver superior customer service. Momentive is a leader in capturing how customers think and feel, helping companies make critical decisions quickly and confidently.
With Momentive, Zendesk will create what businesses really need—a customer intelligence company that connects what customers say and do, with how they think and feel. The combination will give businesses the ability to:
- Listen to your customers: Collect critical information about customer needs, experiences and expectations
- Develop a rich picture: Bring a customer into focus by combining transactional data with market research and insights for the context to truly understand them
- Act on insights: Empower teams to take action with the full breadth of data about their customers as well as feedback and market insights to improve customer interactions
Following a comprehensive review, the boards of directors of Zendesk and Momentive have approved the transaction.
The terms of the transaction provide for Momentive stockholders to receive 0.225 shares of Zendesk stock for each share of Momentive stock, a ratio which represents an implied value of approximately $28 per outstanding share of Momentive stock based on the 15-day volume weighted average price of Zendesk common stock up to and including October 26, 2021. Upon closing of the transaction, Zendesk stockholders will own approximately 78% of the combined company and Momentive stockholders will own approximately 22% of the combined company. The transaction, which is anticipated to close in the first half of 2022, is subject to approval by Zendesk stockholders and Momentive stockholders, the receipt of required regulatory approvals and other customary closing conditions. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Zendesk has published a presentation to provide an overview of the transaction, available on both Zendesk and Momentive’s investor relations websites. Additional details and information about the terms and conditions of the transaction will be available in Current Reports on Form 8-K to be filed by Zendesk and Momentive with the Securities and Exchange Commission.
Quarterly Financial Results
In separate press releases issued today, Zendesk announced financial results for the third quarter of 2021 and Momentive announced preliminary results for its third quarter of 2021. Momentive will issue a press release to share its full third quarter financial results on November 9, 2021.
Source: Business World