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Cloud-Based Call Center Operator Five9 To Be Purchased By Zoom In A Deal Worth $15 Bln Deal


07/19/2021


Cloud-Based Call Center Operator Five9 To Be Purchased By Zoom In A Deal Worth $15 Bln Deal
Zoom Video Communications Inc is set to acquire cloud-based call center operator Five9 Inc in an all-stock deal worth $14.7 billion which is the largest ever acquisition by the video conferencing company amid increasing competition in the videoconferencing sector, the core business area of Zoom.
 
Since the Covid-19 pandemic hit the world early last year and people have been forced to stay back home and work and take lessons from home and therefore required video conferencing services, the brand name of this teleconferencing services provider has become household while investors have flocked to the company.
 
However, now that the pandemic has eased out somewhat with the roll out of Covid019 vaccine all across the world, the focus of the San Jose, California based company has now getting shifted to cloud-calling product Zoom Phone which is about two years old and its conference-hosting product Zoom Rooms, amid largest of the tech companies such as Facebook and Alphabet's Google start to also spruce up their video products. 
 
"The acquisition is expected to help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity by adding the $24-billion contact center market," Zoom said in a statement on Sunday.
 
The company added in the statement that Zoom Phone service, an alternative to legacy phone offerings, would be complemented by the acquisition as it would be able to add business customers of Five9 and would be able to combine its own contact centre software for optimizing customer interactions across channels.
 
According to Five9's website, the company’s clients include Under Armour, Lululemon Athletica Inc and Olympus Corp.
 
Zoom said that the chief executive of Five9, Rowan Trollope, will continue to remain in the position till the completion of the deal which is expected to happen in the first half of next year. Zoom will incorporate Five9 as one of its operating unit.
 
Zoom added that 0.5533 shares of Class A common stock of Zoom for each share of Five9 would be given to stakeholders of Five9 according to the acquisition deal which has been approved by the boards of both companies.
 
Based on the July 16 closing share price of Zoom Class A common stock, this represents a price of $200.28 for each share of Five9 common stock, or nearly a 13% premium, and an implied deal value of about $14.7 billion.
 
Over the last one year, the share price of zoom has risen by 45 per cent along with surge in the stocks of other conferencing platforms such as Cisco Systems Inc's Webex and Microsoft Teams. This surge was driven by a tremendous growth in usage of such platforms because of the coronavirus pandemic which has accelerated the trend of online working, learning and socializing.
 
According to tech consultancy Gartner, the cloud-based conferencing industry spending is expected to reach $5.41 billion this year while it had reached $5.02 billion in 2020.
 
(Source:www.livemint.com)