(Reuters) -Zoom Video Communications Inc. has agreed to buy cloud software provider Five9 (NASDAQ 🙂 Inc. under a total deal worth about $ 14.7 billion to target business customers looking to increase customer engagement, he said Sunday.
The teleconferencing service provider has become a famous name and a preferred investor in the year since the coronavirus pandemic, as companies and schools have adopted their services to hold virtual classes, office meetings and socializing.
The San Jose, California-based company is now shifting its focus to its two-year-old cloud phone product Zoom Phone and conference hosting product Zoom Rooms as major players on Facebook (NASDAQ 🙂 and Alphabet ( NASDAQ 🙂 ‘s Google amp its video products.
“The acquisition is expected to help strengthen Zoom’s presence with the company’s customers and allow them to accelerate their long-term growth opportunity by adding the $ 24 billion contact center market,” he said. Zoom in on a statement.
The acquisition will complement the Zoom Phone service, an alternative to the old-fashioned phone offering by adding Five9 business customers and combining its contact center software to optimize customer interaction between channels, he added.
Five9 will become a Zoom operating unit and its executive director, Rowan Trollope, will become a president of the company, remaining as head of unit after the agreement, which is expected to close in the first half of 2022, he said.
Under the agreement, approved by the boards of the two companies, Five9 shareholders will receive 0.55533 shares of Class A common share of Zoom for each share of Five9, he added.
Based on the July 16 closing stock price of the Zoom Class A common stock, this represents a price of $ 200.28 for each share of the Five9 common stock, and an implied value of the deal of about $ 14.7 billion.
Shares in Five9 ended up 0.6% at $ 177.60 on Friday, while Zoom rose 1.4% to $ 361.97, valuing the company at about $ 106 billion.
Zoom has increased 45% over the last year, as conference platforms, which also include Cisco Systems Inc. (NASDAQ 🙂 ‘s Webex and Microsoft (NASDAQ 🙂 teams, have seen an increase in usage due to coronavirus pandemic that stimulated a seismic shift to online work, learning and socialization.
Global spending on cloud-based conferencing is projected to reach $ 5.41 billion this year, up from $ 5.02 billion in 2020, according to technology consultancy Gartner (NYSE :). It doesn’t track market share, but analysts cite Zoom and Cisco as the leaders.
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