- GeneralM&A
- October 29, 2021
- 5 minutes read
Deal: Zendesk Buys SurveyMonkey Owner Momentive For $4B
Zendesk (NYSE: ZEN), a well-known software maker for customer support and sales functions, is stepping up its game with a…
Zendesk (NYSE: ZEN), a well-known software maker for customer support and sales functions, is stepping up its game with a major acquisition. It’s acquiring Momentive (NASDAQ: MNTV), the firm that owns popular survey software tool SurveyMonkey.
- Zendesk is buying Momentive all with shares and no cash element. Momentive’s shareholders will receive 0.225 Zendesk shares for each Momentive stock unit they hold, making $4.1bn in total when the deal was announced. However, Zendesk’s stock has slipped over 20% since the announcement, making the current price $3.1bn.
- Similarly, Momentive’s stock was down 11% on Friday, an expected reaction to Zendesk’s movement. Zendesk announced the deal simultaneously as its earnings report, and it appears its shareholders aren’t pleased with both. The substantial share drop could even affect the sale, mirroring the Zoom-Five9 case when the latter’s acquisition was called off after Zoom’s shares dropped massively.
Combining Zendesk and Momentive is a strategy that’s easy to grasp. Together, they’ll make a more formidable customer support and sales software player amid a tough competition to face.
The acquisition is a significant step in Zendesk’s ambitious plan to hit $3.5bn in annual revenue by 2024, compared to $1bn in 2020. Momentive brought in $375mn in revenue last year, a substantial contribution to the table.
- Momentive’s SurveyMonkey is one of the most used survey software tools globally and the anchor of the company’s business. In fact, SurveyMonkey Inc was Momentive’s original name before it changed this year to reflect its push outside just surveys.
- Momentive went public in 2018 at a valuation of $1.5bn. Selling for over $3bn three years later doesn’t seem like a bad deal, although shareholders seem to be clamoring for more given their cold reaction to it.
- If all goes as planned, the acquisition is expected to close in the first half of 2022.
