Zoom Video Communications Inc said on Sunday that it has agreed to acquire cloud software provider Five9 Inc in an all-stock transaction valued at approximately US$14.7 billion to target corporate customers who want to increase customer engagement.
Since the coronavirus pandemic, this conference call service provider has become a household name and a favorite of investors as businesses and schools use its services to host virtual classes, office gatherings, and social events.
The San Jose, California-based company is now shifting its focus to its two-year-old cloud calling product, Zoom Phone, and conference hosting product, Zoom Rooms, as giants such as Facebook and Alphabet’s Google are expanding their video products. .
In a statement, Zoom said: “This acquisition is expected to help increase Zoom’s influence among corporate customers and accelerate its long-term growth opportunities by increasing the $24 billion contact center market.”
It added that the acquisition will complement the Zoom Phone service, which is an alternative to traditional phone products, by increasing Five9’s commercial customers and combining its contact center software to optimize customer interactions across channels.
Five9 will become an operating department of Zoom, and its CEO Rowan Trollope will become the company’s president and continue to be the head of the department after the transaction is completed. The transaction is expected to be completed in the first half of 2022.
It added that under the agreement approved by the boards of the two companies, Five9 shareholders will receive 0.5533 shares of Zoom A common stock per Five9.
According to the closing price of Zoom A common stock on July 16, this represents the price of Five9 common stock at $200.28 per share, and the implied transaction value is approximately $14.7 billion.
Five9’s stock price rose 0.6% to 177.60 US dollars on Friday, while Zoom rose 1.4% to 361.97 US dollars, the company’s valuation is about 106 billion US dollars.
Zoom has risen 45% in the past year because of the surge in usage of meeting platforms including Cisco Systems Inc’s Webex and Microsoft Teams, as the coronavirus pandemic has triggered a huge shift to online work, study, and socialization.
According to data from the technology consulting company Gartner, spending on global cloud-based conferences this year is expected to reach 5.41 billion U.S. dollars, up from 5.02 billion U.S. dollars in 2020. It does not track market share, but analysts list Zoom and Cisco as leaders.