© Reuters. FILE PHOTO: This illustration image dated March 15, 2021 shows small toy figures in front of the Zoom logo. REUTERS / Dado Ruvic / Illustration
(Reuters) – Zoom Video Communications Inc has agreed to buy cloud software provider Five9 (NASDAQ 🙂 Inc in an all-stock deal valued at approximately $ 14.7 billion to target business customers looking to increase customer loyalty want, it said on Sunday.
The teleconferencing service provider has become a household name and investor darling in the year since the coronavirus pandemic as companies and schools use its services for virtual courses, office meetings, and networking.
The San Jose, California-based company is now shifting its focus to its two-year-old cloud calling product Zoom Phone and conference hosting product Zoom Rooms as larger players Facebook (NASDAQ 🙂 and Alphabet (NASDAQ 🙂 ‘s Google amp their video products.
“The acquisition is expected to help improve Zoom’s presence with enterprise customers and enable it to accelerate its long-term growth opportunities by adding the $ 24 billion contact center market,” Zoom said in a statement.
The acquisition will complement Zoom Phone, an alternative to traditional phone offerings, by adding Five9’s business customers and combining its contact center software to optimize customer interactions across all channels, the company added.
Five9 will become an operating unit of Zoom and its CEO, Rowan Trollope, will become president of the company and head of the unit after the deal, which is expected to close in the first half of 2022, it said.
Under the pact approved by the boards of both companies, Five9 shareholders will receive 0.5533 shares of Zoom Class A common stock for each share of Five9, she added.
Based on the July 16 closing price of Zoom’s Class A share, this equates to a price of $ 200.28 for each Five9 common share and an implied transaction value of approximately $ 14.7 billion.
Five9’s shares rose 0.6% to $ 177.60 on Friday, while Zoom rose 1.4% to $ 361.97 and valued the company at around $ 106 billion.
Zoom rose 45% over the past year as conference platforms, which include Cisco Systems Inc (NASDAQ 🙂 ‘s Webex and Microsoft (NASDAQ 🙂 teams, spike in usage due to the coronavirus pandemic that sparked seismic activity saw a shift to online working, learning and socializing.
Global spending on cloud-based conferencing is projected to reach $ 5.41 billion this year, up from $ 5.02 billion in 2020, according to a technology consultancy gardener (NYSE :). It doesn’t track market share, but analysts cite Zoom and Cisco as market leaders.
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