Deal: Zoom Buys Cloud Contact Center Firm Five9 For $15B

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After wrapping up a year that sent its stock soaring absurdly high, videoconferencing company Zoom is putting that stock into use as currency to make a splashy acquisition. It’s agreed to buy Five9, a provider of contact and call center software hosted on the cloud, for the sum of $14.7bn.

  • Zoom is paying for Five9 entirely with shares. The $14.7bn price tag represents 14% of Zoom’s current market cap of $107bn. As it is, Five9 is Zoom’s first billion-dollar acquisition and a very big one at that.
  • Five9 is a publicly-traded company that Zoom is taking into private hands. The company is paying a 13% premium to Five9’s closing market cap on Friday, the last trading day before the deal was announced.
  • Zoom’s acquisition makes sense for a post-pandemic world where it’s expecting the use of its videoconferencing software to drop down significantly. The Covid-19 pandemic drove many people and corporates globally to pick up Zoom and exploded the company’s revenue by 326% in 2020, wherein its stock soared almost 400%. 
  • Now, Zoom is betting on cloud contact center software for long-term growth opportunity, putting its money largely where its mouth is. Five9 is a pioneer of such cloud-hosted software powering contact and call centers for enterprises.
  • Following the close of the acquisition, Five9 will become an operating unit of Zoom. Its CEO Rowan Trollope will continue leading the company but now as a President reporting to Zoom CEO Eric Yuan. Yuan and Trollope have previous similarities as Cisco executives before leaving for their respective companies.
  • Five9’s acquisition is expected to close in the first half of 2022.

2 Comments

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