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Zoom to purchase cloud software company Five9 for $14.7B

Zoom to purchase cloud software company Five9 for $14.7B
Leading video conference platform Zoom said Sunday it is purchasing Five9 for $14.7 billion. File Photo by Stefani Reynolds/UPI | License Photo

July 19 (UPI) -- The video-conferencing platform Zoom said it will purchase the cloud-based software company Five9 for $14.7 billion in an all-stock deal.

Zoom has become ubiquitous with virtually all gatherings -- from family get-togethers to large-scale conventions -- during the coronavirus pandemic. Five9 provides software to customer service centers for more than 2,000 clients.

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"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," Eric S. Yuan, Zoom's founder said in a statement Sunday.

"Enterprises communicate with their customers primarily through the contact center and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers," Yuan said.

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Zoom said the purchase will boost its emerging Zoom Phone offering, which is a cloud phone system that enabling organizations to connect and interact in expanded ways.

"Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers," Rowan Trollope, CEO of Five9 said in a statement.

"It has always been Five9's mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way."

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The deal marks another point in Zoom's rapid rise. Before the COVID-19 pandemic, Zoom was valued at $16 billion, but its market cap has now reached $106.7 billion.

Scott Kessler, an analyst with Third Bridge, said Zoom appears to be diversifying ahead of the video-conference market cooling off.

"It's worth noting this would be by far Zoom's largest-ever M&A deal, perhaps designed to make an impact from a diversification perspective," Kessler told CNN Business.

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