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Saturday, July 24, 2021

Zoom buys San Ramon-based Five9 for $14.7 billion to prepare for post-pandemic world

by Rob McLean and Michelle Toh | CNN Business

Zoom, the video-conferencing platform became very popular During covid-19 pandemic, is spending $14.7 billion on cloud-based software company Five9 to boost its appeal with business customers.

Zoom announced the acquisition on Sunday night. In a statement, it said the move will “help increase Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity.”

Five9 provides software to customer service centers for over 2,000 customers worldwide.

The all-stock deal will give Five9 shareholders approximately 0.5 shares of Zoom’s Class A common stock for every Five9 share.

Zoom’s billionaire CEO and founder Eric Yuan said it’s only natural to add Five9.

“Enterprises primarily communicate with their customers through the Contact Center, and we believe this acquisition creates a leading customer engagement platform that will help define what companies of all sizes can do with their customers. How do we connect with you,” he said in a statement.

Scott Kessler, an analyst who leads technology, media and telecommunications coverage for Third Bridge, said the deal “intends to expand the company’s enterprise offerings and relationships as well as its total addressable market.”

“It’s worth noting that this will be Zoom’s biggest M&A deal to date … it’s probably designed to make an impact from a diversification perspective,” Kessler told CNN Business.

Back in June, Zoom announced plan to acquire German company Kites, which develops real-time machine translation. The terms of that deal were not disclosed.

Zoom, a 10-year-old company based in San Jose, Calif., has been one of the epicenters of the pandemic. biggest success stories.

Just two years ago, the company was rated about $16 billion. Its market cap has since grown to approximately $106.7 billion.

But while the coronavirus crisis has helped Zoom become a household name, the company faces pressure to find new avenues of growth as economies reopen and the need for remote conferencing dips.

Even with its success, analysts say Zoom will eventually need to add new features to encourage more people to pay for its services.

The company’s latest acquisition allows it to push into a new area: customer service centers. just zoom said On Sunday it wanted to “build the customer engagement platform of the future” while estimating it was entering the “$24 billion contact center market”.

The two companies will hold a Zoom call on Monday to share more details about the deal.

—Samantha Murphy Kelly contributed to this report.

™ and © 2021 Cable News Network, Inc., WarnerMedia Co. All rights reserved.

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