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Zendesk punished by investors after vowing to remain independent – TechCrunch

The Zendesk Property saga took several new turns this week, with an outside investor, Jana Partners, hate speech against the companya review of its strategic options coming to an end, and the enterprise software company choose to remain independent.

Now worth less than $10 billion Zendesk has attracted more attention in recent months than one would expect from a company of this size. But after that Announcement that it would buy Momentive (SurveyMonkey) for more than $4 billion last year, and Zendesk was there a bloody fight with outside investors, which has proven to be recurring headline fodder.

Even if Jana wasn’t particularly in love 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 helpdesk-related tasks — and to a lesser extent customer relationship management, or CRM The market for customer experiences. Zendesk suggested an investor presentation that the deal could help grow revenue from about $1.39 billion as of November 2021 to $3.5 billion by 2024, which Zendesk said was ahead of schedule.

Whatever Zendesk was selling in relation to Momentive, Jana wasn’t buying, and the tenor of the conversation between the company and its shareholder grew strained over time. Zendesk did its own thing and ignored Jana’s increasingly strict requirements outlined in letters to the company and in public statements. This includes this week’s threatening lawsuit if Zendesk did not immediately call a shareholders’ meeting.

Jana wants Zendesk to be sold. Zendesk earlier this year turned down a $17 billion offer to sell the company, which, as we wrote at the time, “upset” Jana. The offer came from a consortium of private equity firms, and it’s easy to imagine why founder and CEO Mikkel Svane, who built Zendesk from the ground up, didn’t want to go down that route. emotion aside, an analysis by TechCrunch concluded at the time that the deal had undervalued the company.

It shouldn’t come as a surprise that Zendesk got into some kind of sell-off process. We’ve seen a few big corporate deals over the past few years, including Broadcom’s recent announcement Buy VMware for $61 billion, which is still under a Go Shop regulation and subject to regulatory review. Before that, some big software deals were made Salesforce buys Slack for nearly $28 billion, Oracle buys Cerner at the same price and Microsoft buys Nuance Communications for $19 billion

It is worth noting that the above deals took place in a different economic environment. Whether it’s warranted, markets have pulled back and VC dollars are getting tighter. Ratings are down everywhere. So it would make sense that even if Zendesk wanted to sell itself, now might not be a particularly good time to do so.

The company agrees. Zendesk had a chance to take the money and run away, but believed it was actually worth more than the offer — at least at this point. As tech companies continue to decline, does the rejected $17 billion offer from earlier this year look more attractive? Sure, but enough to question the rejection decision? let’s find out

Zendesk punished by investors after vowing to remain independent – TechCrunch Source link Zendesk punished by investors after vowing to remain independent – TechCrunch