Zoom Plans to Spend $14.7 Billion to Acquire Five9

Zoom has agreed to acquire Five9, a smart cloud contact center provider, for US$14.7 billion, which is the largest acquisition in the company’s history. Zoom hopes to strengthen its popular video conferencing application through the acquisition to cope with increasing competition.

ZOOM will acquire Five9 in the form of all shares. According to an agreement announced on Sunday, Five9 shareholders will receive 0.5533 shares of Zoom A common stock for each Five9 stock held by Five9. After the transaction is completed, Five9 will become an operating subsidiary of Zoom. The transaction is subject to shareholder approval and is expected to be completed in the first half of 2022.

ZOOM said that the acquisition will push Zoom into a US$24 billion call center market and help it better compete with companies such as RingCentral Inc. that attract global users through the Internet. The two companies said in a statement that the transaction is aimed at helping ZOOM build a cloud-based calling service, Zoom Phone. According to Five9’s website, the company’s customers include well-known brands such as Under Armour , Citrix Systems, Athena Health  and lululemon . A way for Five9 to sell products to each other’s customers.

Zoom CEO Yuan Zheng said in a statement: “We are always looking for ways to enhance the platform, and the addition of Five9 is a match made in heaven.”

It is reported that in this transaction, Zoom’s adviser is Goldman Sachs, and Five9’s adviser is Qatalyst Partners. Rowan Trollope, CEO of Five9, will serve as President of Zoom, while continuing to operate Five9 as an operating unit.

Zoom is using stocks that rebounded sharply to fund the acquisition of Five9. The company’s stock price has soared about 5 times in 2020 and has risen by 7.3% year-to-date, giving it a market value of more than $100 billion.

According to Bloomberg data, this acquisition is Zoom’s fourth transaction since the beginning of the epidemic. In June, Zoom announced that it had signed an agreement to acquire Karlsruhe Information Technology Solutions-kites GmbH, a German translation software manufacturer, but did not disclose the relevant terms.

Data show that in March this year, Zoom participated in the acquisition of a minority stake in the software company Assemble Inc.. In May 2020, the company acquired Keybase Financial Group Inc., which provides secure messaging and file sharing services, to strengthen its encryption technology, but did not disclose the terms of the acquisition.