Zendesk Files Investor Presentation Detailing Compelling Strategic Rationale and Financial Benefits of Proposed Acquisition of Momentive
Momentive Represents a Strategic Opportunity that Zendesk is Uniquely Positioned to Leverage to Drive Enhanced Growth and Value for Shareholders
Continues to Strongly Recommend Shareholders Vote “FOR” Proposal to Approve the Issuance of Shares of Zendesk Common Stock in Connection with the Transaction at Upcoming Special Meeting
Zendesk, Inc. posted on its investor relations website, and filed with the Securities and Exchange Commission, an investor presentation detailing the significant value the Company believes its proposed acquisition of Momentive Global Inc. (“Momentive”) will bring to shareholders, customers and other stakeholders.
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Highlights from the presentation include the following:
- Zendesk’s business has never been stronger – the Company is ready for a strategic transaction.
- Momentive represents a strategic opportunity that Zendesk is uniquely able to leverage, adding the next layer of growth and a near doubling of its total addressable market.
- The compelling strategic logic of this transaction translates into concrete financial benefits and clear added value for Zendesk shareholders. The acquisition is projected to increase 2025 revenue by $1.2 billion, 35% higher than Zendesk’s standalone plan, at a higher growth rate and higher margins.
- Zendesk’s offer to acquire Momentive is the result of a thorough and deliberative process by the full Zendesk Board of Directors and management team to evaluate opportunities to profitably grow the business.
- Zendesk struck this transaction at the right price, time and currency to realize value for shareholders not otherwise attainable through partnership or organic development.
Zendesk’s Established Track Record of Execution
- Zendesk has scaled considerably since its founding in 2007 and through its IPO in 2014 to the present. Today it is able to handle billions of customer interactions for over 100,000 customers.
- Zendesk is ranked by Gartner as the #1 provider for digital customer service use cases and the youngest Leader in Gartner Magic Quadrant.
- Revenue growth is accelerating year-over-year as Zendesk is winning larger customers, increasing its net expansion rate and growing free cash flow.
- The Company has consistently met or exceeded its revenue guidance and equity analysts’ long-term expectations and is confident in its future enhanced revenue opportunities with Momentive.
- Having established this track record of growth, including through a deliberate strategy to move up-market in enterprise, the Momentive transaction now represents an opportunity to extend Zendesk’s strategy to provide more value to customers, and therefore add more value to the business, particularly through customer intelligence.
Realizing Zendesk’s Vision through Customer Intelligence
- This acquisition will generate value for Zendesk shareholders by further differentiating both Zendesk’s and Momentive’s product offerings as well as through greater global reach, cross-selling opportunities and by nearly doubling Zendesk’s total addressable market to more than $165 billion by 2025.
- Both Zendesk’s and Momentive’s existing product offerings will be enhanced by adopting solutions from the other, deepening relationships with customers.
- Momentive’s underlying asset of customer interactions, sentiment and behavior data for current, as well as future, customers significantly strengthens and differentiates Zendesk’s value proposition in its core customer service market while creating significant future opportunities.
- Zendesk expects to generate approximately $55 million in the first wave of 2023 revenue synergies, growing to approximately $275 million in 2025. These are conservative initial projections based on cross-selling existing products at existing prices to existing customers of both companies.
- Zendesk sees significant additional revenue upside from the introduction of new products, new pricing and packaging and improved strategic positioning as a customer intelligence platform.
- Zendesk’s Board has evaluated many M&A opportunities since its IPO using a highly disciplined review process. The Board’s independence, experience and thorough evaluation of the transaction, with the assistance of its independent legal and financial advisors, informed its unanimous decision to acquire Momentive.
- Zendesk’s offer to acquire Momentive represents a reasonable premium to win a competitive process relative to recent comparable transactions.
The Zendesk Board of Directors continues to unanimously recommend that all shareholders vote “FOR” the proposal approving the issuance of Zendesk Common Stock in connection with the acquisition of Momentive.
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