Are Shareholders Happy that Zendesk is Buying the Parent Company of SurveyMonkey?
Posted on 10/30/2021
Zendesk, Inc. (NYSE: ZEN) inked a deal to acquire Momentive Global Inc. (Momentive) (NASDAQ: MNTV) , 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 $28 per outstanding share of Momentive stock based on the 15-day volume weighted average price of Zendesk common stock up to and including October 26, 2021. Upon the close of the transaction, Momentive CEO Zander Lurie will continue to Momentive’s management team. The boards of directors of Zendesk and Momentive have approved the transaction. Upon closing of the transaction, Zendesk stockholders will own approximately 78% of the combined company and Momentive stockholders will own approximately 22% of the combined company. The transaction, which is anticipated to close in the first half of 2022, is subject to approval by Zendesk stockholders and Momentive stockholders, the receipt of required regulatory approvals and other customary closing conditions. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Factoring in the all-stock deal, based on October 28th prices, the acquisition is around US$ 4.1 billion in value.
Once the deal was announced on October 28, 2021, the very next day shares of Zendesk shares dropped 14%. The deal includes hefty equity dilution.
Momentive was formerly SurveyMonkey.
Advisors
Goldman Sachs & Co. LLC is serving as lead financial advisor and Centerview Partners LLC is also serving as financial advisor to Zendesk. Hogan Lovells US LLP is serving as legal counsel to Zendesk. Allen & Company LLC and J.P. Morgan Securities LLC are serving as equal lead financial advisors and Wilson Sonsini Goodrich & Rosati Professional Corporation is serving as legal counsel to Momentive.
