Momentive, the company behind SurveyMonkey, announced on Monday that it is changing its Board of Directors and authorizing a $200 million share repurchase program after Zendesk's plan to acquire the company fell through.
Zendesk said in October that it entered an acquisition deal that would have seen Momentive shareholders receive 0.225 shares of Zendesk stock for each share of Momentive stock. The deal amounted to about $4 billion.
Zendesk stockholders would have owned approximately 78% of the combined company and Momentive stockholders will own approximately 22%.
But on Friday, Zendesk announced that it was terminating the deal after it did not receive the approval of its stockholders to adopt the proposal to issue shares of Zendesk common stock at its stockholder meeting on February 25.
According to regulatory filings seen by Bloomberg, about 90% of those at the meeting voted against the deal. Bloomberg added that board members at both companies were against the deal and some Momentive investors even argued the company's leaders may have breached their fiduciary duties with the deal.
Zendesk leaders tried to illustrate how the deal may help the company reach its goal of $4.6 billion in combined revenue by 2025, to no avail.
Two weeks ago, Reuters reported that Zendesk is facing a proxy fight after Jana Partners nominated four directors to the board and said the company needed to be rehabilitated after the attempted deal with Momentive.
"While we were excited by the potential of this transaction to transform the customer experience and create stockholder value, we respect and appreciate the perspectives of our stockholders," said Mikkel Svane, CEO of Zendesk.
SurveyMonkey rebranded to Momentive in June 2021, arguing that a rebrand would better convey its portfolio of experience management services.
SurveyMonkey was launched in 1999 with a consumer-oriented survey product geared toward the individual user, and its array of freemium consumer services remains a core component of the company's business.
But over the last several years, the company has turned to its business and enterprise products as a way to move upmarket and generate long-term value for the company.
Eventually, the SurveyMonkey brand became restrictive and failed to communicate the breadth of the company's portfolio, said Momentive president Tom Hale.
"The term SurveyMonkey, we have outgrown it as a company and we have come to realize that we need to tell the world who we are in a different way," said Hale. "What has driven our success is the freemium self-serve survey business, but the last few years has seen us tilting upmarket."