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Zoom to Acquire Five9 Inc for $ 14.7 Billion

CIO Insider Team | Monday, 19 July, 2021
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Zoom Video Communications Inc announced its biggest-ever purchase, a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc, as competition in its core video conferencing market heats up.

By integrating Five9's business customers and merging its contact center software to boost customer interactions across channels, the purchase will supplement Zoom Phone, an alternative to legacy phone options.

Currently the video-conferencing services provider prefers to shed light on its two-year-old cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms, for major rivals like Facebook and Alphabet's Google are ramping up their video offerings.

Five9 will become an operating unit of Zoom, and its CEO, Rowan Trollope, will become a president of the firm, keeping on as the unit's leader when the purchase closes in the first half of 2022, according to the company.

Zoom stated, "the acquisition is expected to help increase Zoom's position with business clients and allow it to accelerate its long-term growth option by including the $24 billion contact center industry"

Five9 stockholders will receive 0.5533 shares of Zoom's Class A common stock for each share of Five9, as per the agreement, which was approved by the boards of both companies.

Based on the closing share price of Zoom Class A common stock on July 16, this equates to a price of $200.28 per share of Five9 common stock, or a nearly 13 percent premium, and an implied deal value of $14.7 billion.

Zoom's shares increased 1.4 percent to $361.97, putting the firm at about $106 billion. Zoom went public in 2019.

The video-conferencing service provider revenue increased 45 percent last year, as conferencing platforms such as Cisco Systems Inc's Webex and Microsoft Teams saw a boom in use as a result of the coronavirus pandemic, which has prompted a sea growth to online working, learning, and socializing.

Zoom stated, "the acquisition is expected to help increase Zoom's position with business clients and allow it to accelerate its long-term growth option by including the $24 billion contact center industry".

The video-conferencing services provider has become a household name and investor favorite, as it has landed in the good books among many companies, schools, healthcare institutions and organizations that seek its services.

It serves customers such as Under Armour, Lululemon Athletica Inc, and Olympus Corp.

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