Zoom Video Communications emerged as one of the video conferencing apps during the pandemic to connect people who had been isolated by COVID-19. Now the company is making an all-stock transaction valued at approximately $14.7 billion to secure its growth and compete with Google Meet, and Microsoft Teams.
In the all-stock-deal, Zoom will acquire Five9, a provider of cloud-based customer-service software, Zoom CEO Eric Yuan wrote in a blog post on Sunday.
“We expect that this acquisition will help enhance Zoom’s presence with customers and allow us to accelerate our long-term growth opportunity by adding the $24 billion contact center market,” he wrote.
The deal gives publishers and media companies a stronger way to communicate with brands as they work through and collaborate in the advertising creative process and implement media-buying strategies.
Zoom’s revenue in the three months ended April 30 skyrocketed 191% from a year ago to about $956 million, as a result of the COVID-19 pandemic.
Yuan called Five9 a “pioneer of cloud-based contact center software,” and believes that “building the customer engagement platform of the future” means combining Five9’s Contact Center as a Service platform with Zoom’s communications platform will change how businesses connect with their customers.
The deal will help to support the company’s Zoom Phone app that offers a digital alternative to legacy phone services. It connects people through a cloud-based system and enables people to communicate in a way that is similar to how Google Voice works.
Five9 will become an operating unit of Zoom. The deal is likely to close in the first half of 2022.
In 2020, Zoom released a category of products called Zoom for Home that includes software and hardware devices. The division is aimed at employees working from home, but also can be used by consumers looking for a reliable video-calling system. It also can be used by a variety of industries, including healthcare.
Trip Chowdhry, managing director of equity research at Global Equities Research, called Zoom a "clean environment company.” In a research note published Monday, he wrote that the company emits "4.6 Million Metric Tonnes of CO2 is same as Annual Energy used by 422,542 Homes according to EPA."