Zoom Video Communications Inc (NASDAQ:ZM) has announced a $14.7 billion deal to buy cloud call center service provider Five9 Inc (NASDAQ:FIVN) in an all-stock transaction. The latter has been 20 years in the market, and it is set to be an operating unit of the video conferencing firm.
Entering the Contact Center Market
On Sunday, the two companies said that the deal is expected to close in the first half of 2022. Zoom was worth $9 billion during its public listing in 2019.
The deal is part of Zoom’s ongoing efforts to increase its offerings, and given the soaring growth during the pandemic, the firm has worked hard to add more office collaboration products, such as the Enterprise Cloud Phone System and the all-in-one app, Zoom for Home – DTEN ME.
It also represents Zoom’s most significant acquisition, given the meteoric rise of its stock price.
Eric S. Yuan, founder and chief executive of Zoom, said in a statement: “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 deal is seen as a nifty move by the two companies, as they are likely to significantly increase their cross-selling opportunities within each other’s respective client bases.
But more importantly, the deal will edge Zoom closer to dabbling into the contact centers market, currently worth $24 billion.
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As reported by CNBC, this is the second-biggest tech deal in the U.S. so far in 2021, “after Microsoft’s planned $16 billion purchase of Nuance Communications.”
TechCrunch informs that Five9 has amassed over 2,000 customers worldwide including Citrix and Under Armour. Further, it processes over 7 billion minutes of calls annually.
Rowan Trollope, chief executive of Five9 said, “Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers.”
“It has always been Five9’s mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way.”
Trollope asserts that joining forces with Zoom will allow Five9’s to offer access to top-notch solutions such as Zoom Phone, “that will enable them to realize more value and deliver real results for their business.”
“This, combined with Zoom’s ‘ease-of use’ philosophy and broad communication portfolio, will truly enable customers to engage via their preferred channel of choice.”