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Author: Alan LittleDate: 2021-07-20

Five9 (FIVN) +5% after being acquired by Zoom (ZM) in $14.7bn deal

Five9 (FIVN) shares jumped 5% in US trading on Monday after the cloud software company was acquired by Zoom Video Communications (ZM) in a $14.7bn deal.

Zoom said that the addition of Five9 would “enhance” its services, specifically its ‘Phone’ offering as the company specialises in providing cloud-based call centres.

The move is believed to be part of Zoom’s push to expand its communication services as it looks to capitalise on the huge number of users who have started using the platform during the last 18 months.

In the 12 months to 31st January, Zoom said that its sales had skyrocketed +400% to $2.65bn, while during the same period, its shares soared 400%.

A slowdown in growth is expected in a post-pandemic world, but Zoom is looking at new ways to keep both business and personal users on the platform while reaching a wider audience.

Bringing in Five9 is set to increase Zoom’s total addressable market to an estimated $24bn.

Zoom CEO Eric Yuan said that Five9 was a “natural fit” as the firm looks to drive engagement and improve how enterprises communicate.

He added: “We believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers.”

Rather than cash, the deal will be an all-stock transaction that values Five9 shares at just over $200.

Five9 traded higher in the US on Monday after news of the deal broke, with FIVN up around 4.77% by early afternoon at $185.94.

Zoom shares headed in the other direction, dropping 4.55% to $345.51 on the Nasdaq.

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