Zendesk close to deal with group of buyout firms

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Zendesk close to deal with group of buyout firms

A person familiar with the matter said Zendesk Inc. is close to reaching a deal that will be acquired by a group of buyout firms led by Hellman Friedman and Permira.

The person who asked not to be identified because of the information was private, said an agreement could be announced as soon as Friday. The talks came after Zendesk said earlier this month it would remain independent after failing to find a potential buyer.

A final agreement hasn't been reached and might not happen, the person said.

Representatives for Permira, Hellman Friedman and Zendesk didn't want to say anything. The Wall Street Journal reported earlier that Zendesk was close to an agreement.

The shares of Zendesk jumped by as much as 52% in extended trading after the Journal's report. The company has a market value of $7.1 billion, as it closed Thursday at $57.95 in regular trading in New York.

The San Francisco-based company said on June 9 that it would no longer try to sell itself after a strategic review that reached out to 16 potential strategic partners and 10 financial sponsors. There were no actionable proposals submitted, and final bidders cited adverse market conditions and financing difficulties at the end of the process, according to a statement by Zendesk. In February, Zendesk received an unolicited takeover offer from buyout firms that valued the company at $127 to $132 a share. Hellman Friedman, Advent International and Permira were among the firms reported by Bloomberg. It came a few weeks before Zendesk dropped its effort to buy SurveyMonkey's parent, Momentive Global Inc., saying it didn't get the necessary support from its shareholders to go through with the acquisition.

In October, Zendesk had agreed to buy Momentive, an all-stock transaction valued at around $4 billion at the time. The transaction was met with a dramatic sell-off in both companies, as investors balked at the tie-up. The Zendesk shareholder Janus Henderson Group Plc came out against the acquisition and Jana Partners, an activist investor, urged shareholders to reject the deal.

Zendesk, a customer service software company, said it would gain from Momentive's market research products. The shares fell by 51% since the deal was announced on October 28.

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