Zoom to Buy Cloud Contact Center Provider Five9 for $14.7 Billion

Video conferencing company Zoom Video Communications Inc. revealed on Sunday that it is acquiring cloud contact center provider Five9 in a deal worth $14.7 billion.

The deal mark’s Zoom’s first billion-dollar deal and comes as the company looks to expand beyond video chat.

Five9′s market cap as of last Friday’s close was $11.9 billion which means the acquisition price amounts to a 13% premium.

Eric Yuan, founder and chief executive officer of Zoom stated, “We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers.”

The deal is the second largest tech deal of 2021, coming behind Microsoft’s planned $16 billion purchase of Nuance Communications, according to FactSet.

Zoom said Five9 stockholders will receive 0.5533 shares of Zoom Video Communications for every Five9 share.

Five9′s revenue climbed 33% to $435 million last year. The company’s CEO Rowan Trollope told CNBC’s Jim Cramer earlier this year that the company signed two of its largest deals during the latest period, expecting them to generate more than $20 million combined annually.

“We’re not having to convince customers that cloud is an acceptable option anymore,” he stated. “They’re just diving in.”

The transaction is expected to close in the first half of 2022. Five9 stockholders still have to approve the deal, and it requires regulatory clearance.

Zoom and Five9 had hosted a call on Zoom for investors on Monday.

Shares of Zoom soared nearly 400% in 2020 but have dropped about 36% since its peak in October.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.