Zendesk Nears Agreement With Group Led by H&F, Permira

(Bloomberg) — Software maker Zendesk Inc. is close to reaching a deal to be acquired by a group of buyout firms led by Hellman & Friedman and Permira, said a person familiar with the matter.

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An agreement could be announced as soon as Friday, said the person, who asked not to be identified because the information was private. The talks come after Zendesk said earlier this month that 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 Zendesk, Hellman & Friedman and Permira declined to comment. The Wall Street Journal reported earlier that Zendesk was close to an agreement.

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

The San Francisco-based company said June 9 that it would no longer seek to sell itself after a strategic review that reached out to 16 potential strategic partners and 10 financial sponsors. Ultimately, “no actionable proposals were submitted,” Zendesk said in a statement, and final bidders cited “adverse market conditions and financing difficulties at the end of the process.”

In February, Zendesk received an unsolicited takeover offer from buyout firms that valued the company at $127 to $132 a share. Those firms including Hellman & Friedman, Advent International and Permira, Bloomberg reported. That offer came a few weeks before Zendesk dropped its effort to buy SurveyMonkey’s parent, Momentive Global Inc., saying it failed to garner the necessary support from its shareholders to go through with the acquisition.

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

Zendesk, which makes customer service software, had said it would gain from Momentive’s market research products. The shares have declined 51% since the deal was announced Oct. 28.

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