Zoom, a telecommunication company that offers high-speed internet services and telephone plans, has just announced a deal with Five9 to buy the company in an all-stock transaction valued at $14.7 billion. The acquisition will help Zoom expand its reach into the enterprise market and further cement its place as a leading provider of broadband services in the US.
Zoom to Buy Five9 is a company that offers cloud-based contact center solutions. In an all-stock deal valued at $14.7 billion, the company will be acquired by Cisco Systems Inc.
Zoom Video Communications Inc., the videoconferencing service that gained a household brand across the world during the epidemic, intends to invest part of the $14.7 billion in a $14.7 billion purchase to guarantee its future growth.
Zoom will be able to extend its potential solutions for corporate and enterprise customers thanks to the all-stock acquisition for Five9 Inc., a supplier of cloud-based customer-service software. Zoom will be able to tap into a $24 billion contact-center industry as a result of the expansion potential, according to the firm.
Zoom, which began trading on the public markets in 2019, has benefited greatly from the move to remote employment and online education. Since extensive lockdowns began in the United States and abroad more than a year ago, the stock’s worth has more than quadrupled.
Zoom has increased its efforts in recent months to guarantee that it can continue to expand even after the impacts of the epidemic have faded and people return to the workplace and transition to hybrid work.
In a blog post announcing the acquisition, Zoom Chief Executive Eric Yuan stated, “The trend towards a hybrid workforce has increased over the past year, accelerating contact centers’ move to the cloud and growing demand by customers for customized and personalized experiences.”
This is Zoom’s largest purchase to date. It purchased startup Keybase Inc. last year to help it develop end-to-end encryption capabilities for its videoconferencing service, and it bought translation software company Kites GmbH just last month.
Mr. Yuan said the Five9 acquisition will help support the company’s Zoom Phone business, which uses a cloud-based service to replace workplace telephone equipment.
Contact centers, often known as call centers, are used by many businesses to offer representatives who answer consumer inquiries. In recent years, the cloud-based contact-center industry, which works via the internet, has grown in popularity. During the pandemic, when many contact center employees were working remotely, use of the technology increased.
Zoom isn’t the first tech firm that has taken advantage of its increasing stock price to help finance a large purchase. Salesforce.com Inc. decided to buy Slack Technologies Inc. for $27.7 billion in stock and cash last year, making it one of the most visible instances of a major cloud computing company rushing to gain strength in the pandemic’s remote-work boom. Last year, Advanced Micro Devices Inc. agreed to acquire rival chipmaker Xilinx Inc. in an all-stock transaction for $35 billion.
Zoom’s revenue increased 191% year over year to $956 million in the three months ending April 30. According to FactSet, Zoom’s stock has doubled in value since last year, giving it a market capitalization of $106.7 billion.
During the epidemic, Zoom was best known for offering free videoconferencing services, but as businesses sought to communicate with their workers and customers, paid users grew dramatically. Zoom had approximately 467,100 clients with more than ten workers at the end of the year, up almost sixfold from the previous year.
Five9 shareholders will receive 0.5533 shares of Zoom’s Class A common stock for each share of Five9 Inc. as part of the deal. Zoom’s stock has risen by more than 46% in the last year, owing to an increase in user numbers since the epidemic began.
“Joining forces with Zoom will give Five9’s business clients access to best-of-breed technologies, especially Zoom Phone, that will help them to generate greater value and achieve actual outcomes for their businesses,” said Five9 CEO Rowan Trollope.
The deal has been authorized by the boards of directors of both businesses, but it still has to be approved by Five9 shareholders. The transaction is expected to complete in the first half of 2023 and will need regulatory clearances, according to the company.
Five9 will become an operational unit of Zoom once the deal is completed. Mr. Trollope will continue in his current position as president of Zoom and report to Mr. Yuan.
The five9 revenue is a company that has been in the business of providing telecommunications solutions for over 50 years. The company was acquired by Cisco Systems Inc. for $14.7 billion in an all-stock deal.
Frequently Asked Questions
Who did Zoom just buy?
Zoom just bought a company called Lightstream.
Why is Zoom buying Five9?
Zoom is a company that provides cloud-based communication services. They are buying Five9 because they want to provide their customers with the ability to have an easy, reliable way to communicate through text or voice.
Is Five9 a public company?
Yes, Five9 is a public company.