Zoom announced on Sunday, July 18, that it’s buying Five9, a provider of cloud contact center software, in an all-stock transaction valuing the company at US$14.7 billion.
The deal marks Zoom’s first billion-dollar acquisition and comes as the company prepares for a post-pandemic world with employees returning to the office. It’s the second-biggest US tech deal this year, behind Microsoft’s planned US$16 billion purchase of Nuance Communications, according to FactSet.
“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,” said Zoom CEO Eric Yuan in a press release.
Zoom has been among the top growth stories in the 16 months since COVID-19 caused a sudden shutdown of offices across the globe, forcing workers in finance, retail, tech and law offices to communicate from remote locations.
After expanding revenue by 326% in 2020, Zoom faces a natural slowdown, especially as companies reopen and face-to-face meetings resume. While the company has launched new products to reckon with coming changes to its business, it’s now so big that organic growth alone is unlikely to satisfy Wall Street. It also needs new revenue sources as Microsoft ramps up competition in video chat with Teams.
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