Video conferencing platform Zoom has just announced that it will acquire cloud platform Five9 by stock payment for $14.7 billion.
|Despite a 326% vertical increase in revenue in 2020, Zoom is facing a natural slowdown in revenue growth. Photo: AFP|
This agreement marks Zoom’s first billion-dollar acquisition as the company prepares for its post-pandemic business plan when workers return to the office, according to CNBC. And FactSet recorded this as the second-largest technology deal in the US this year, second only to Microsoft’s $ 16 billion plan to buy computer software technology company Nuance Communications.
“We’re constantly looking for ways to grow our platform, and it’s only natural that the addition of Five9 will bring even more satisfaction and value to our customers,” emphasized Zoom CEO Eric Yuan. in a press release dated July 18.
Cloud call center service provider Five9 ended its stock trading day on July 18 with a market capitalization of $11.9 billion, or $177.60 per share. Zoom said Five9 stock holders will receive 0.5533 shares of Zoom Video Communications for each Five9 share they hold. Thus, Five9 stock is valued at $200.28 per share, a 13% surplus and accounts for about 14% of Zoom’s nearly $107 billion market capitalization.
Zoom has been among the leaders in growth over the past 16 months since the Covid-19 outbreak caused offices around the world to suddenly close, forcing employees in financial, retail, and industrial offices. technology, and lawyers must communicate remotely.
Despite a steep 326% increase in revenue in 2020, Zoom is facing a natural slowdown in revenue growth, especially as companies reopen and face-to-face meetings are reactivated.
Although Zoom has launched new products to keep up with the upcoming changes to its business. However, Zoom’s current scale is too large, the organic growth of this business alone is not likely to satisfy Wall Street investors. Zoom needs new revenue streams as rival Microsoft strengthens its competition by revamping its Teams video chat platform.
Zoom stock has nearly quadrupled in 2020. But since peaking in October 2020, Zoom stock is now down 36%.
And Five9 has also grown rapidly since the beginning of 2020 thanks to the demand for cloud-based mobile PBX solutions. businesses and users increased during the Covid-19 pandemic. Enterprises had to quickly adapt to all kinds of cloud software, including software for contact centers.
Five9’s revenue is up 33% to $435 million in 2020. Five9 CEO Rowan Trollope confirmed in May that the company has signed two of its biggest deals in recent times with a expected to generate more than 20 million USD annually.
Zoom’s acquisition of Five9 brought together two former Cisco executives. Eric Yuan built WebEx and was acquired by Cisco in 2007 for $3.2 billion. Eric Yuan then stayed at Cisco until he left and founded Zoom in 2011.
Rowan Trollope joined Cisco in 2012 after 22 years at Symantec and rose to become Senior Vice President of all Cisco Collaboration Products. Rowan Trollope is considered by analysts to be an effective arm of CEO Chuck Robbins. Mr. Trollope left Cisco to take the role of CEO at Five9 in 2018.
It is expected that Mr. Trollope will become the Chairman of Zoom and remain the CEO of Five9. Zoom’s acquisition of Five9 is expected to be completed in the first half of 2022. The two companies will hold an online meeting with the investors on the Zoom platform on the morning of July 19, New York time.