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.
Its stock, which could be bought for less than $70 each when 2020 began, is now worth five times that number.
Shares dipped 5% before the opening bell Monday, trading for $358.07.
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.