Zoom to buy cloud software provider Five9 in $15 bln deal

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Zoom Video Communications Inc has agreed to buy cloud software provider Five9 Inc in an all-stock deal worth approximately $14.7 billion to target enterprise customers looking to increase engagement of customers, it said on Sunday.

The teleconferencing provider has become a household name and investor favorite in the year since the coronavirus pandemic, as businesses and schools use their services to host classes. Virtual, office meet and exchange.

The San Jose, California-based company is now shifting its focus to two-year-old cloud calling product Zoom Phone and conferencing product Zoom Rooms as larger players like Facebook and Google’s Alphabet step up. their video products.

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“The acquisition is expected to strengthen Zoom’s presence with corporate customers and enable the company to accelerate its long-term growth opportunities by adding a $24 billion contact center market. la,” Zoom said in a statement.

The acquisition will complement the Zoom Phone service, an alternative to legacy phone services, by adding Five9’s business customers and incorporating its contact center software to optimize interoperability. customer engagement across channels, it added.

Five9 will become an operating unit of Zoom and its chief executive, Rowan Trollope, will become the company’s president, serving as unit director after the deal, which is due to close in first half of 2022, it said.

Under the agreement, approved by the boards of directors of both companies, Five9 shareholders will receive 0.5533 shares of Zoom’s Class A common stock for each Five9 share, it said. more.

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Based on the July 16 closing price of Zoom Class A common stock, this represents a price of $200.28 per share of Five9 common stock and an implied trading value of approximately $14. 7 billion dollars.

Shares of Five9 were up 0.6% at $177.60 on Friday, while Zoom was up 1.4% at $361.97, valuing the company at around $106 billion.

Zoom has grown 45% over the past year, as conferencing platforms, including Cisco Systems Inc’s Webex and Microsoft Teams, have seen a surge in usage as the coronavirus pandemic has fueled an earthquake switch to working online, learning and socializing.

Global spending on cloud-based conferencing is forecast to reach $5.41 billion this year, up from $5.02 billion in 2020, according to technology consulting firm Gartner. It doesn’t track market share, but analysts say Zoom and Cisco are the leaders. (Reporting by Kanishka Singh in Bengaluru; Editing by Miyoung Kim, Clarence Fernandez and Gerry Doyle)

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https://financialpost.com/pmn/business-pmn/zoom-to-buy-cloud-software-provider-five9-in-15-bln-deal-3

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