Letter Reminds Stockholders of Expected Value
Creation Opportunity
Strongly Recommends Stockholders Vote
“FOR” Proposal to Approve the Issuance of Shares of Zendesk
Common Stock to Momentive Stockholders in Connection with the
Transaction at Upcoming Special Meeting
Zendesk, Inc. (NYSE: ZEN) today sent a letter to stockholders
commenting on its proposed acquisition of Momentive Global Inc.,
which was announced on October 28, 2021, and recommending their
approval of the issuance of Zendesk Common Stock in connection with
the transaction at the Special Meeting of Stockholders scheduled
for February 25, 2022. Proxy materials relating to this Special
Meeting were mailed to Zendesk stockholders. The full text of the
letter follows:
Dear Fellow Stockholder,
The Zendesk Board of Directors believes that Zendesk’s proposed
acquisition of Momentive, which was announced on October 28, 2021,
will create substantial incremental long-term value for Zendesk
stockholders. Zendesk’s Board unanimously recommends you vote in
favor of the proposal approving the issuance of Zendesk Common
Stock in connection with the transaction at the upcoming Special
Meeting of Stockholders, which will be held on February 25,
2022.
Strategic and Financial Benefits of the Momentive
Transaction
The combination with Momentive will deliver significant benefits
to Zendesk stockholders that are otherwise not attainable,
including:
- Achievement of Zendesk's strategy of transforming Customer
Relationship Management, by creating a Customer Intelligence
Platform that combines Momentive's leadership in agile experience
management software (spanning surveys, customer experience and
market research) with Zendesk's leading customer service and sales
platform to enable truly actionable insights and understanding of
the customer for businesses of all sizes;
- A doubling of Zendesk’s addressable market to $165 billion,
ensuring far greater opportunity for sustained high revenue growth
at larger scale;
- Realization of the first wave of sales-led revenue synergies of
approximately $275 million by 2025, deriving primarily from a
scaled and global Zendesk enterprise sales force selling
Momentive’s agile experience management and insights products to
our customer base within the Zendesk product experience, yielding
approximately $4.6 billion in combined 2025 revenue growing at a
higher rate than Zendesk’s forecasted smaller-scale standalone
business;
- Significant upside to these conservative revenue synergy
estimates from product-led growth, namely new product
introductions, new pricing and packaging, and acceleration of
Zendesk’s core sales and customer service businesses due to the
addition of Momentive product capabilities and data, making our
offering more valuable and increasing customer spend and
stickiness;
- The ability to drive further synergies by accelerating
Momentive’s enterprise growth, leveraging Zendesk’s proven track
record of scaling and driving adoption with enterprise customers,
with additional opportunities to internationalize Momentive’s
offerings across Zendesk’s diversified global client base and
go-to-market reach; and
- Financial benefits from greater scale, including an expanded
global talent base, significantly increased number of customer
relationships, operating efficiencies that can be re-invested in
growth, greater research and development resources, and more
engineering expertise and technology – all of which will allow
Zendesk to better serve customers and accelerate innovation.
Importantly, we have increased conviction in the upside and the
expected synergies noted above as a result of our preliminary
integration planning work, which includes direct correspondence
with customers.
Zendesk’s Rigorous Process and Strong Corporate
Governance
Zendesk’s Board and management team regularly review the
Company’s performance, future growth prospects and overall
strategic direction within the context of the current business and
economic environment and in consideration of the Company’s
long-term business strategy. This entails reviewing Zendesk’s
strategy as a standalone company as well as considering potential
opportunities for business combinations, acquisitions, and other
financial and strategic alternatives.
The Zendesk Board’s determination to acquire Momentive is the
result of a thoughtful and deliberative review process spanning
multiple alternatives within adjacent and complementary markets.
Momentive, along with several other candidates, was identified and
discussed by the Zendesk Board as a potential acquisition target in
regularly conducted strategic reviews as early as the first half of
2019. Zendesk’s decision to bid in Momentive’s process to explore
strategic alternatives was an output of the Board’s structured
review of existing capabilities and growth needs. In that process,
Zendesk evaluated a number of inputs, including, importantly,
direct feedback from customers requesting better customer survey
and market research capabilities. The Board carefully assessed the
potential benefits of the transaction, evaluated risk factors, and
conducted an extensive due diligence process with its independent
financial and legal advisors in connection with its decision to
acquire Momentive.
Zendesk’s proposal reflects the Board’s unanimous conviction
that this combination represents a unique opportunity for Zendesk
stockholders and a critical step forward for Zendesk to achieve its
strategic ambition to transform customer relationship management
through the development of a Customer Intelligence
Platform.
Zendesk’s management team and Board look forward to discussing
their conviction in the merits of the transaction with stockholders
in greater detail. Because of the strategic significance to Zendesk
of the proposed acquisition, Zendesk supports the rights of all
stockholders to provide their views and vote on the issuance of
Zendesk Common Stock in the transaction. Due to the compelling
strategic and financial benefits of the proposed combination, the
Zendesk Board strongly encourages stockholders to vote in favor of
the proposal approving the issuance of Zendesk Common Stock in
connection with the transaction at the upcoming Special Meeting on
February 25, 2022.
Your Vote Is Important
The Zendesk Board of Directors unanimously recommends that all
stockholders vote “FOR” the
proposal approving the issuance of Zendesk Common Stock in
connection with the acquisition of Momentive. Your vote on this
matter is very important, regardless of the number of shares you
own. If stockholders have questions or need assistance in voting
your shares, please contact the Company’s proxy solicitor,
MacKenzie Partners, Inc., at (800) 322-2885 Toll-Free or by email
at zenproxy@mackenziepartners.com.
Thank you for your continued support.
Sincerely, The Zendesk Board of Directors
Additional Information and Where to
Find It
This communication relates to a proposed business combination
transaction between Zendesk and Momentive. In connection with the
proposed transaction, Zendesk filed with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form
S-4 (the “registration statement”) that includes a joint proxy
statement of Zendesk and Momentive and that also constitutes a
prospectus of Zendesk with respect to shares of Zendesk common
stock to be issued in the proposed transaction (the “joint proxy
statement/prospectus”). The definitive joint proxy
statement/prospectus and WHITE proxy card of Zendesk or WHITE proxy
card of Momentive, as applicable, were first mailed to Zendesk
stockholders and Momentive stockholders beginning on or about
January 10, 2022. Each of Zendesk and Momentive may also file other
relevant documents regarding the proposed transaction with the SEC.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND
SECURITY HOLDERS OF ZENDESK AND MOMENTIVE ARE URGED TO READ THE
REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND ALL
OTHER RELEVANT DOCUMENTS THAT ARE OR WILL BE FILED WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION, INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT
MOMENTIVE, ZENDESK AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of the
joint proxy statement/prospectus and other documents that are filed
or will be filed with the SEC by Zendesk or Momentive through the
SEC’s website (www.sec.gov). Copies of the documents filed by
Zendesk with the SEC also may be obtained free of charge at
Zendesk’s investor relations website at
https://investor.zendesk.com or upon written request to Zendesk,
Inc. at 989 Market Street, San Francisco, CA 94103. Copies of the
documents filed with the SEC by Momentive will be available free of
charge by accessing Momentive’s investor relations website at
investor.momentive.ai or upon written request to Momentive at One
Curiosity Way, San Mateo, California 94403.
Participants in the
Solicitation
Zendesk, Momentive, their respective directors and certain of
their respective executive officers are participants in the
solicitation of proxies from the respective stockholders of Zendesk
and Momentive in respect of the proposed transaction. Information
about Zendesk’s directors and executive officers and their
ownership of Zendesk common stock is set forth in Zendesk’s proxy
statement for its 2021 Annual Meeting of Stockholders on Schedule
14A filed with the SEC on April 2, 2021. Information about
Momentive’s directors and executive officers and their ownership of
Momentive’s common stock is set forth in Momentive’s proxy
statement for its 2021 Annual Meeting of Stockholders on Schedule
14A filed with the SEC on April 20, 2021. Additional information
regarding the interests of the participants in the proxy
solicitations is contained in the joint proxy statement/prospectus.
You may obtain free copies of these documents as described in the
preceding paragraph.
Cautionary Statement Regarding
Forward-Looking Statements
This communication may contain forward-looking statements,
including, among other things, statements regarding the anticipated
benefits of the proposed transaction, the anticipated impact of the
proposed transaction on the combined company’s business and future
financial and operating results, the expected amount and timing of
anticipated synergies from the proposed transaction, the
anticipated timing of closing of the proposed transaction and other
aspects of Zendesk’s or Momentive’s operations or operating
results. Words such as “may,” “should,” “will,” “believe,”
“expect,” “anticipate,” “target,” “project,” and similar phrases
that denote future expectations or intent regarding the combined
company’s financial results, operations, and other matters are
intended to identify forward-looking statements. You should not
rely upon forward-looking statements as predictions of future
events. The outcome of the events described in these
forward-looking statements is subject to known and unknown risks,
uncertainties, and other factors that may cause future events to
differ materially from the forward-looking statements in this
communication, including (i) the ability to complete the proposed
transaction within the time frame anticipated or at all; (ii) the
failure to realize the anticipated benefits of the proposed
transaction or those benefits taking longer than anticipated to be
realized; (iii) the risk that uncertainty about the proposed
transaction may adversely affect relationships with Zendesk’s
customers, partners, suppliers, and employees, whether or not the
transaction is completed; (iv) the effect of the announcement of
the proposed transaction on the ability of Zendesk or Momentive to
retain and hire key personnel; (v) the risk that disruptions from
the proposed transaction will harm Zendesk’s or Momentive’s
business, including current plans and operations; (vi) current or
future litigation related to the proposed transaction and the
resulting expense or delay; (vii) the failure to obtain stockholder
or regulatory approvals in a timely manner or otherwise; (viii) the
occurrence of any event, change or other circumstances that could
give rise to the right of one or both of Zendesk or Momentive to
terminate the proposed transaction; (ix) the diversion of the
attention of the respective management teams of Zendesk and
Momentive from their respective ongoing business operations; (x)
the ability of Zendesk to successfully integrate Momentive’s
operations and technologies; (xi) the ability of Zendesk to
implement its plans, forecasts and other expectations with respect
to its business after the completion of the transaction and realize
expected synergies; (xii) the effect of uncertainties related to
the COVID-19 pandemic on U.S. and global markets, Zendesk’s or
Momentive’s respective business, operations, revenue, cash flow,
operating expenses, hiring, demand for their respective solutions,
sales cycles, customer retention, and their respective customers’
businesses and industries; (xiii) risks relating to the market
value of Zendesk’s common stock to be issued in the proposed
transaction; (xiv) Zendesk’s ability to adapt its products to
changing market dynamics and customer preferences or achieve
increased market acceptance of its products; (xv) the intensely
competitive market in which Zendesk operates; (xvi) the development
of the market for software as a service business software
applications; (xvii) Zendesk’s substantial reliance on its
customers renewing their subscriptions and purchasing additional
subscriptions; (xviii) Zendesk’s ability to effectively market and
sell its products to larger enterprises; (xix) Zendesk’s ability to
develop or acquire and market new products and to support its
products on a unified, reliable shared services platform; (xx)
Zendesk’s reliance on third-party services, including services for
hosting, email, and messaging; (xxi) Zendesk’s ability to retain
key employees and attract qualified personnel, particularly in the
primary regions Zendesk operates; (xxii) Zendesk’s ability to
effectively manage its growth and organizational change, including
its international expansion strategy; (xxiii) Zendesk’s expectation
that the future growth rate of its revenues will decline, and that,
as its costs increase, Zendesk may not be able to generate
sufficient revenues to achieve or sustain profitability; (xxiv)
Zendesk’s ability to integrate acquired businesses and technologies
successfully or achieve the expected benefits of such acquisitions;
(xxv) real or perceived errors, failures, or bugs in Zendesk’s
products; (xxvi) potential service interruptions or performance
problems associated with Zendesk’s technology and infrastructure;
(xxvii) Zendesk’s ability to securely maintain customer data and
prevent, mitigate, and respond effectively to both historical and
future data breaches; (xxviii) Zendesk’s ability to comply with
privacy and data security regulations; (xxix) Zendesk’s ability to
optimize the pricing for its solutions; and (xxx) other adverse
changes in general economic or market conditions. The
forward-looking statements contained in this communication are also
subject to additional risks, uncertainties, and factors, including
those described in Zendesk’s and Momentive’s most recent Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q and other
documents filed by either of them from time to time with the SEC.
The forward-looking statements included in this communication are
made only as of the date hereof. Zendesk and Momentive do not
undertake to update any forward-looking statements made in this
communication to reflect events or circumstances after the date of
this communication or to reflect new information or the occurrence
of unanticipated events, except as required by law.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote of approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
About Zendesk
Zendesk started the customer experience revolution in 2007 by
enabling any business around the world to take their customer
service online. Today, Zendesk is the champion of great service
everywhere for everyone, and powers billions of conversations,
connecting more than 100,000 brands with hundreds of millions of
customers over telephony, chat, email, messaging, social channels,
communities, review sites and help centers. Zendesk products are
built with love to be loved. The company was conceived in
Copenhagen, Denmark, built and grown in California, taken public in
New York City, and today employs more than 5,000 people across the
world. Learn more at www.zendesk.com.
Source: Zendesk, Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20220113005801/en/
Investor Contact: Jason Tsai, +1 415-997-8882 ir@zendesk.com
Additional Investor Contact: MacKenzie Partners, Inc. Dan
Burch/Bob Marese, +1-212-929-5500
dburch@mackenziepartners.com/bmarese@mackenziepartners.com
Media Contacts: Stephanie Barnes, +1 415-722-0883
press@zendesk.com
John Christiansen +1 415-618-8750 Robin Weinberg +1 212-687-8080
Sard Verbinnen & Co Zendesk-SVC@sardverb.com
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