July 18 (Reuters) – Zoom Video Communications Inc (ZM.O) has agreed to buy cloud software provider Five9 Inc (FIVN.O) in an agreement worth around 14.7 billion dollars to target business customers looking to build customer engagement, he said Sunday.
The teleconferencing service provider has become a household name and investor favorite in the year since the coronavirus pandemic, as businesses and schools embrace its services to host virtual classes, office meetings and to socialize.
The San Jose, Calif., Based company is now focusing on its Zoom Phone cloud calling product and Zoom Rooms conference hosting product as the biggest players in Facebook (FB.O) and Alphabet (GOOGL. O) Google amp their video products.
“The acquisition is expected to help strengthen Zoom’s presence with corporate clients and enable it to accelerate its long-term growth opportunity by adding the $ 24 billion contact center market,” Zoom said in a statement. .
The acquisition will complement the Zoom Phone service, an alternative to traditional phone offerings, by adding Five9’s business customers and combining its contact center software to optimize customer interactions across all channels, he added. .
Five9 will become a business unit of Zoom and its chief executive, Rowan Trollope, will become chairman of the company, remaining as the head of the unit after the deal, which is expected to be concluded in the first half of 2022, he said.
Under the pact, approved by the boards of directors of both companies, Five9 shareholders will receive 0.5533 Zoom class A common shares for each Five9 share, he added.
Based on the Zoom Class A share’s closing price on July 16, this represents a price of $ 200.28 for each common share of Five9 and an implied trade value of approximately $ 14.7 billion.
Shares of Five9 finished up 0.6% to $ 177.60 on Friday, while Zoom rose 1.4% to $ 361.97, valuing the company at around $ 106 billion.
Zoom has grown 45% over the past year as conferencing platforms, which also include the Webex teams of Cisco Systems Inc (CSCO.O) and Microsoft (MSFT.O), have seen an increase in their use due to the coronavirus pandemic which caused a seismic crisis. move on to work, learning and socializing online.
Global spending on cloud-based conferencing is expected to reach $ 5.41 billion this year, from $ 5.02 billion in 2020, according to technology consultancy Gartner. It doesn’t track market share, but analysts cite Zoom and Cisco as the leaders.
Report by Kanishka Singh in Bengaluru; Editing by Miyoung Kim, Clarence Fernandez and Gerry Doyle
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