Advertisement

Zoom looks past pandemic with $14.7B deal to buy Five9

Click to play video: 'How ‘digital transformation’ is changing business'
How ‘digital transformation’ is changing business
As organizations look for innovation and change during the COVID-19 pandemic, many are putting an emphasis on ‘digital transformation.’ John McLaughlin, partner with MNP Technology Solutions, explains what the term means and how we see examples on a daily basis, from visits to the doctor’s office to Zoom meetings. – Jun 20, 2021

Zoom, the videoconferencing company whose growth was supercharged by the pandemic over the past year, will buy the cloud contact centre provider Five9 in an all-stock deal valued at about $14.7 billion.

That is far greater than Zoom’s market valuation a little over two years ago when it went public for slightly more than $9 billion.

Zoom founder and CEO Eric Yuan said in a blog post Sunday that the acquisition will accelerate the company’s long-term growth by adding the $24 billion contact centre market. That will give Zoom greater exposure to more business clients. Yuan added that it also the deal also complements the Zoom Phone, a cloud phone system that is seeing strong demand.

The size of the deal would have seemed unthinkable when Zoom Video Communications Inc. went public in early 2019, before it became a household name. With the arrival of the pandemic and a global shift to working from home, Zoom is everywhere.

Story continues below advertisement

Its stock, which could be bought for less than $70 each when 2020 began, is now worth five times that number.

Click to play video: '“Zoom divorce” replaces traditional courtroom procedures'
“Zoom divorce” replaces traditional courtroom procedures

Shares dipped 5 per cent before the opening bell Monday, trading for $358.07.

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Shareholders of Five9 Inc. stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9. Based on Zoom’s closing price on Friday, this represents a per share price for Five9 common stock of $200.28.

Five9 will become a unit of Zoom once the transaction closes. Rowan Trollope will become a president of Zoom and continue as Five9 CEO.

The deal is expected to close in the first half of 2022. It still needs approval from Five9 shareholders.

Sponsored content

AdChoices