Video conferencing company Zoom has announced a $14.7 billion all-share deal to buy cloud-based call center operator Five9 Inc (FIVN.O) in its largest-ever acquisition, as competition in the core video conferencing sector heats up.
The teleconferencing service provider has become a household name and investor favorite of the year since the coronavirus pandemic, as companies and schools have adopted its services for virtual classes, office meet-ups, and social networking.
The San Jose, California-based company is now shifting its focus to its two-year-old cloud calling product Zoom Phone and conference-hosting product Zoom Rooms, as bigger players like Facebook (FB.O) and Alphabet (GOOGL.O) Google amp even their video products.
“The acquisition is expected to help strengthen Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunities by adding a $24 billion call center market,” Zoom said in a statement.
It added that the acquisition will complement Zoom Phone, an alternative to legacy phone offerings, by adding business customers from Five9 and combining its call center software to improve customer interaction across channels.
Five9 will become an operating unit of Zoom and its CEO, Rowan Trollope, will become company president, remaining as head of the unit after the deal, which is expected to close in the first half of 2022.
Global spending on cloud-based conferencing is expected to reach $5.41 billion this year, up from $5.02 billion in 2020, according to technology consulting firm Gartner.