Google Meet rival Zoom buys out Five9 in $15 billion deal

On Sunday, Google Meet and MS Teams fierce rival Zoom Video Communications Inc has agreed to buy cloud software provider Five9 Inc in an all-stock deal worth about $14.7 billion; to target business clients looking to boost customer engagement.

Teleconferencing services provider Zoom has become a household name and investor favourite in the year since the coronavirus pandemic; 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 is expected to help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity; by adding the $24-billion contact centre market ,” Zoom said in a statement.

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 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; and an implied deal value of about $14.7 billion.

Shares in Five9 finished up 0.6% at $177.60 on Friday; while Zoom rose 1.4% at $361.97; valuing the company at around $106 billion.

Zoom rose 45% over the past year , as conferencing platforms , which also include Cisco Systems Inc’s Webex and Microsoft Teams; have seen a surge in usage due to the coronavirus pandemic that has spurred a seismic shift to online working; learning and socializing.

Global spending on cloud-based conferencing is forecast to reach $5.41 billion this year , up from $5.02 billion in 2020; according to tech consultancy Gartner. It does not track market share , but analysts cite Zoom and Cisco as the leaders.