Analyst Note
| Dan Romanoff, CPA |Zendesk has agreed to be taken private by Permira and Hellman & Friedman for $77.50 per share in cash, representing a premium of approximately 35% to June 23's closing price. On June 9, Zendesk completed its strategic review process, concluding that after considering a sale of the company, it was in the best interest of shareholders to continue to execute on its strategy. The deal is expected to close in the fourth quarter of this year. We see no material hurdles to the closing of this transaction within the specified time frame, and we are moving our fair value estimate to the $77.50 deal price. After lowering our growth outlook for many of our companies based on a return to normal as the pandemic recedes and other macro factors, we are applying that same framework to Zendesk and lowering our standalone fair value estimate to $115 per share, from $146 previously, in the highly unlikely event this transaction fails to close. While we think shares are undervalued, we have no reason to believe a better offer will emerge.