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Agreement and Plan of Merger
6 Months Ended
Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Agreement and Plan of Merger Agreement and Plan of Merger
On June 24, 2022, we entered into the Merger Agreement with Zoro BidCo, Inc. (“Parent”) and Zoro Merger Sub, Inc. (“Merger Sub”), affiliates of funds advised by private equity firms H&F and Permira.

The Merger Agreement provides that, among other things and on the terms and subject to the conditions of the Merger Agreement, (a) Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent, and (b) at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of common stock of the Company, par value $0.01 per share (other than certain shares as specified in the Merger Agreement) and outstanding equity awards will be converted into the right to receive $77.50 in cash, without interest, subject to any required tax withholding as provided in the Merger Agreement (and, for stock options, less the per share exercise price and, for unvested equity awards, subject to vesting terms and conditions).

The transaction, which has been unanimously approved by Zendesk’s Board of Directors, is expected to close in the fourth quarter of this year. If the Merger is consummated, the Company common stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934 at or after the Effective Time.

The completion of the Merger is subject to the satisfaction or waiver of certain customary mutual closing conditions, including the affirmative vote of holders of a majority of the outstanding shares of Company's common stock having approved adoption of the Merger Agreement (the “Company Stockholder Approval”), the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain other regulatory approvals, and the absence of any law or order by a court or other governmental entity of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the Merger.
The Merger Agreement contains termination rights for each of the Company and Parent. The Company is required to pay Parent a termination fee of $254 million in cash upon termination of the Merger Agreement under specified
circumstances, including, among others, the termination by Parent in the event of an adverse recommendation change by the Board of Directors of the Company or the termination by the Company to enter into an agreement in connection with a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement also provides that a reverse termination fee of $610 million will be payable by Parent to the Company under specified circumstances, including, among others, if (a) Parent fails to consummate the Merger following satisfaction or waiver of certain closing conditions and the Company’s irrevocable confirmation that it is ready to consummate the closing or (b) Parent otherwise breaches its obligations under the Merger Agreement such that there is a failure of certain conditions to the Merger that cannot be cured by March 24, 2023. The Merger Agreement also provides that, in certain circumstances, either party may seek to compel the other party to specifically perform its obligations under the Merger Agreement.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by the full text of the Merger Agreement