Zoom Buys Out Five9 In $15 Billion Deal

Zoom Video Communications Inc will buy Five9 Inc in an all-stock deal.

Zoom Video Communications Inc has agreed to buy cloud software provider Five9 Inc in an all-stock deal worth about $14.7 billion to target business clients looking to boost customer engagement.

Teleconferencing services provider Zoom has become a household name and investor favorite in the year since the coronavirus pandemic, as businesses and schools adopted its services to hold virtual classes, office meets, and socialize.

The San Jose, California-based company is now shifting focus to its two-year-old cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms as bigger players Facebook and Alphabet’s Google amp 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 centre market,” Zoom said in a statement.

The acquisition will complement Zoom Phone service, an alternative to legacy phone offerings, by adding Five9’s business customers and combining its contact centre software to optimize customer interactions across channels, it added.

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

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Under the pact, approved by the boards of both companies, Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9, it added.

Global spending on cloud-based conferencing is forecast to reach $5.41 billion this year, up from $5.02 billion in 2020, according to tech consultancy Gartner. It does not track market share, but analysts cite Zoom and Cisco as the leaders.

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