Home » Tech News » Zoom to Buy Five9 (Cloud Software Provider) for $15 Billion

Zoom to Buy Five9 (Cloud Software Provider) for $15 Billion1 min read

by TechABU
146 Views
Zoom Buys Five9

On Sunday, Zoom Video Communications announced that it has agreed to buy cloud software provider Five9 in an all-stock deal for about $14.7 billion (about Rs. 1,09,890 crores) to target commercial clients seeking to improve customer engagement.

In the year after the coronavirus outbreak, the teleconferencing services company has become a household name and an investor’s favorite. Companies and schools have used its services to host virtual lectures, workplace meetings, and social gatherings.

As major companies like Facebook and Alphabet’s Google ramp up their video offerings, the San Jose, California-based business is now focusing on its two-year-old cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms.

“By adding the $24 billion (approximately Rs. 1,79,420 crores) contact center market, the purchase is expected to help Zoom strengthen its footprint with corporate clients and allow it to accelerate its long-term growth opportunity,” Zoom said in a statement.

By integrating Five9’s corporate customers and merging its contact center software to optimize customer interactions across channels, the purchase will enhance Zoom Phone, an alternative to conventional phone solutions.

Five9 will become an operational unit of Zoom, and its CEO, Rowan Trollope, will become the president of the company, continuing as the unit’s leader once the acquisition closes in the first half of 2022, according to the company.

Five9 investors would get 0.5533 shares of Zoom’s Class A common stock for each share of Five9, according to the agreement, which was authorized by the boards of both businesses.

Based on Zoom Class A common stock’s closing share price on July 16, each share of Five9 common stock would cost $200.28 (approximately Rs. 14,970), implying a transaction value of over $14.7 billion (roughly Rs. 1,09,890 crores).

On Friday, Five9’s stock gained 0.6 percent to $177.60 (approximately Rs. 13,270), while Zoom’s stock rose 1.4 percent to $361.97 (about Rs. 27,060), valuing the business at over $106 billion (roughly Rs. 7,92,450 crores).

Zoom’s usage increased by 45 percent last year due to the coronavirus epidemic, which has prompted a seismic shift to online working, learning, and socializing. Other conferencing systems, such as Cisco’s Webex and Microsoft Teams, have also witnessed a rise in usage.
According to Gartner, global expenditure on cloud-based conferencing is expected to reach $5.41 billion (approximately Rs. 40,440 crores) this year, up from $5.02 billion (about Rs. 37,530 crores) in 2020. Although it does not keep track of market share, experts say Zoom and Cisco are the industry leaders.

Related Articles

Leave a Comment