Zoom Video Communications Inc has announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc.
The deal, its largest-ever acquisition, comes as competition intensifies in its core videoconferencing sector.
Zoom has leveraged the coronavirus pandemic to become a household name and investor favorite as businesses and schools adopted its services to hold virtual classes, office meets and socialise.
The San Jose, California-based company is now shifting focus to its two-year-old cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms as bigger players Facebook and Alphabet’s Google amp up their video products.
The acquisition will complement Zoom Phone service, an alternative to legacy phone offerings, by adding Five9’s business customers and combining its contact centre software to optimize customer interactions across channels, it added.
Five9’s customers include Under Armour, Lululemon Athletica Inc and Olympus Corp, according to its website.
Five9 will become an operating unit of Zoom and its chief executive, Rowan Trollope, will become a president of the company, staying on as chief of the unit after the deal, which is expected to close in the first half of 2022, it said.
Under the pact, approved by the boards of both companies, Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9, it added.
Based on the July 16 closing share price of Zoom Class A common stock, this represents a price of $200.28 for each share of Five9 common stock, or nearly a 13% premium, and an implied deal value of about $14.7 billion.
Shares in Zoom, which went public in 2019, rose 1.4% to $361.97 on Friday, valuing the company at around $106 billion.
Goldman Sachs advised Zoom and Qatalyst Partners advised Five9.