Zoom Set to Buy Cloud Software Vendor Five9 in a $14.7 Billion All-stock Deal

Zoom, one of the leading teleconferencing service providers, announced that it has landed a deal to acquire Five9. The company said that the deal is an all-stock transaction that is valued at $14.7 billion by both parties. 

As a result, Five9 will now become an operating unit of Zoom. Rowan Trollope, Chief Executive, Five9 is on course to become a president of Zoom and continue as the head of the unit once the deal is through. 

Zoom revealed that the major stakeholders from both companies have given the transaction a green signal. As things stand, the deal is expected to close in the first half of 2022 after the regulators approve it. 

SEE ALSO: The Biggest Tech Mergers & Acquisitions in 2021 So Far

How does this deal help Zoom?

Zoom’s share prices have increased consistently over the past few months. The company intends to make the most of this trend by securing its future growth with the acquisition of  Five9. 

The deal will allow Zoom to expand its product portfolio for enterprise and business clients. Besides, this opportunity enables the company to knock on the doors of the $24 billion contact-center market.

The acquisition of Five9 will offer Five9’s business customers complete access to advanced and top-notch solutions such as Zoom Phone. 

COVID-19 pandemic – Impact on Zoom’s Growth

Zoom began trading in public markets in 2019. Although the world economy took a tumble due to the ongoing pandemic, it was a blessing in disguise for Zoom. 

The company was one of the most notable beneficiaries of online schooling and remote working. Since the first quarter of 2020, the value of Zoom’s shares has tripled due to the rising trend toward remote learning and working. 

Apart from the number of free users, Zoom’s paying customers have also grown at an impressive rate. 

Against the backdrop of this trend, Zoom has increased its efforts to ensure its growth even after the pandemic. 

Zoom’s Chief Executive, Eric Yuan, said that the shift toward a hybrid workforce has surged over the past year. As a result, contact centers have made the switch to the cloud to cater to the ever-rising demand for personalized and tailored experiences. 

Rising adoption of cloud-based conferencing 

Investments and consumer spending on cloud-based conferencing have moved in the upward direction over the past couple of years. 

In fact, according to a Gartner report, the global end-user spending on cloud web conferencing solutions will increase by around 24.3% in 2020 [1]. 

The advent of the pandemic has certainly fueled the demand for cloud-based solutions including teleconferencing. As a result, many companies are eyeing mergers and acquisitions to expand their presence in the market. 

SEE ALSO: Hewlett Packard Enterprise (HPE) Acquires Ampool to Strengthen It’s Ezmeral Platform

Image Source: Zoom

Source:

[1] (2020) “Gartner Says Worldwide End-User Spending on Cloud-Based Web Conferencing Solutions Will Grow Nearly 25% in 2020” Gartner [online] Available from: https://www.gartner.com/en/newsroom/press-releases/2020-06-02-gartner-says-worldwide-end-user-spending-on-cloud-based-web-conferencing-solutions-will-grow-nearly-25-percent-in-2020 [accessed July 2021]

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency.  At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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