Zoom Video Communications Inc reported a $14.7 billion all-stock arrangement to acquire cloud-based call center administrator Five9 Inc in its biggest ever acquisition, as rivalry escalates in its core videoconferencing business.
The teleconferencing video services provider has become an easily recognized name and investor top pick in the year since the Covid pandemic, as companies and schools embraced its services to hold virtual classes, office meets and mingle.
The San Jose, California-based company is presently moving concentration to its two year old cloud-calling platform Zoom Telephone and meeting facilitating product Zoom Rooms as greater players Facebook and Alphabet’s Google amp hype their video products.
“The acquisition is expected to support the upgrading of Zoom’s quality with enterprise clients and permit it to speed up its drawn out development opportunity by adding the $24-billion contact center market,” Zoom said in a statement on Sunday.
The acquisition will supplement Zoom Telephone administration, an option in contrast to heritage telephone contributions, by adding Five9’s business clients and joining its contact center software to improve client interaction across stations, it added.
Five9’s clients include Under Armour, Lululemon Athletica Inc and Olympus Corp , as indicated by its site.
Five9 will turn into a working unit of Zoom and its CEO, Rowan Trollope, will turn into a leader of the company, continuing as head of the unit after the arrangement, which is expected to close in the first half of 2022, it said.
Under the settlement, supported by the boards of the two companies, Five9 investors will get 0.5533 portions of Class A common stock of Zoom for each share of Five9, it added.
In view of the July 16 deal, closing share price of Zoom Class A common stock, this addresses a price of $200.28 for each share of Five9 common stock, or almost a 13% premium, and a suggested bargain worth of about $14.7 billion.
Shares in Zoom which opened to the public in 2019 rose 1.4% to $361.97 on Friday, valuing the company at around $106 billion.
Zoom rose 45% over the previous year, as conferencing platforms, which likewise include Cisco Systems Inc’s, Webex and Microsoft Teams, have seen a surge in usage due to the Covid pandemic that has prodded a seismic shift to web based working, learning and mingling.
Global spending on cloud-based conferencing is expected to reach $5.41 billion this year, up from $5.02 billion in 2020, as indicated by tech consultancy Gartner. It doesn’t follow shares of the overall industry, yet analysts refer to Zoom and Cisco as the leaders.
Goldman Sachs advised Zoom and Qatalyst Partners exhorted Five9.
