Zoom, the videoconferencing company whose growth was supercharged by the pandemic during the last year, will buy the cloud call center company Five9 in an all-stock deal valued at about $14.7 billion.
That is far greater than Zoom's market valuation a little more than two years ago, when it went public for slightly more than $9 billion.
Zoom founder and CEO Eric Yuan said in a blog post Sunday that the acquisition will accelerate the company's long-term growth by adding the $24 billion contact-center market. That will give Zoom greater exposure to more business clients. Yuan added the deal also complements the Zoom Phone, a cloud phone system that is seeing strong demand.
The size of the deal would have seemed unthinkable when Zoom Video Communications Inc. went public in early 2019, before it became a household name. With the arrival of the pandemic and a global shift to working from home, Zoom is everywhere.
Its stock, which could be bought for less than $70 each at the start of 2020 just before the detection in the U.S. of COVID-19, is now trading at five times that.
There were indications that Zoom might be in the hunt for acquisitions early this year that would accommodate more growth. In January, the company announced a secondary offering of shares that could raise up to $1.5 billion for, among other things, “acquisitions or strategic investments.”
Five9 will become a unit of Zoom once the transaction closes. The deal is expected to close in the first half of 2022. It still needs approval from Five9 shareholders.