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Zoom is buying Five9: In All-Stock Deal Valued at $14.7 Billion

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Zoom is buying Five9

Highlights:

  • Zoom to Buy Five9 for $14.7 Billion to Boost Post-Covid Growth.
  • The boards of directors of Zoom and Five9 have approved the transaction.
  • Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9.

Zoom Video Communications Inc announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc in its largest-ever acquisition, as competition intensifies in its core video conferencing sector. The proposed acquisition is Zoom’s latest attempt to expand its offerings. In the past year, the video conferencing software has added several office collaboration products, a cloud phone system, and an all-in-one home communications appliance.

The deal is Zoom’s biggest-ever acquisition. Last year it bought startup Keybase Inc. to help it build end-to-end encryption capabilities for its videoconferencing service, and last month it acquired translation software maker Kites GmbH.

As part of the agreement, Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9 Inc. Zoom’s shares are up more than 46% over the past year, fueled by increased user numbers since the pandemic hit.

Zoom CEO Eric Yuan in a press release said:

“We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers.” The acquisition of Five9 — which has amassed over 2,000 customers worldwide including Citrix and Under Armour and processes over 7 billion minutes of calls annually — will help Zoom enter the “$24 billion” market for contact centers, the company said.

Rowan Trollope, the CEO of Five9 said:

“Joining forces with Zoom will provide Five9’s business customers access to best-of-breed solutions, particularly Zoom Phone, that will enable them to realize more value and deliver real results for their business.”

Five9’s customers include big names like Under Armour, Citrix, Athena Health, and Lululemon, according to its website. Rowan Trollope, CEO of Five9, will become a president at Zoom while continuing to run Five9 as an operating unit. Goldman Sachs advised Zoom and Qatalyst Partners advised Five9. Shares in Zoom, which went public in 2019, rose 1.4% to $361.97, valuing the company at around $106 billion.

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