On Thursday, Zendesk Inc announced it would acquire Momentive Global Inc, parent of the popular platform SurveyMonkey, for about $4 billion in stock.
It is the largest acquisition made by Zendesk, where the price is almost equal to a third of Zendesk’s market capital which is $14.3 billion as of October 29th. Momentive’s market cap, on the other hand, amounts to $3.62 billion. Zendesk reported a 32 per cent revenue growth at $347 million.
As per the deal, Momentive shareholders will get 0.225 shares of Zendesk stock for every Momentive stock. The value comes to $28 a share as per the 15-day average for Zendesk through October 26.
The deal is expected to close in the first half of 2022, once the approval from Zendesk and Momentive’s shareholders is through. The new arrangement of the companies will leave about 78 per cent of the total share for Zendesk shareholders and about 22 per cent of the total allocation for Momentive shareholders.
Zendesk expects the acquisition to help speed up its revenue plan to reach $3.5 billion in 2024.
While Zendesk faces many rivals in the marketing and sales software industry, including Salesforce, Freshworks, ServiceNow, and Zoho, it instantly obtains a business with quarterly $100 million revenue by acquiring Momentive.