Five9 and Zoom Terminate Acquisition Deal
Cloud contact center solutions provider Five9 and Zoom Video Communications late yesterday announced that their merger agreement has been terminated.
In July, Zoom announced that it would acquire Five9 in an all-stock transaction valued at approximately $14.7 billion. The agreement, however, did not receive the required number of votes from Five9 shareholders. Five9 will continue to operate as a stand-alone publicly traded company.
"We had the opportunity to engage extensively with our shareholders since our transaction announcement. We greatly appreciate their feedback and confidence in Five9's future prospects and share their views regarding the significant potential for value creation as a stand-alone company," said Rowan Trollope, CEO of Five9, in a statement.
Trollope also expressed confidence in Five9's ability to deliver continued value across its stakeholder groups.
"Five9 has built an industry-leading and differentiated cloud contact center platform that has transformed the way businesses engage with their customers," he said. "Over the past few months, we have continued to execute relentlessly in the market. With a focus on product innovation, excellence in go-to-market execution, and a strong and evolving partner ecosystem, we continue to strengthen our relationships with customers and bring new businesses onto the Five9 platform.
"The contact center is the new front door for business and, as the market shifts from on-premises to cloud and digital transformation accelerates, we believe we are positioned to build on this momentum and grow market share," Trollope added.
Zoom and Five9 will continue the partnership that was in place prior to the announcement, which includes support for integrations between their respective unified communications-as-a-service (UCaaS) and contact center-as-a-service (CCaaS) solutions and joint go-to-market efforts.
While this deal is now off the table, industry insiders expect Zoom to continuing pursuing similar deals.
"Zoom has done a great job providing meeting technology through the pandemic, but it was inevitable that they would want to move further into other spaces, like phone, contact center, and even collaboration. The Five9 acquisition was their opportunity to move away from a largely consumer-based model and into the future of business communications," said Dialpad CEO and founder, Craig Walker.
"These days, customers want a single communications workspace from which they can manage all of their communications, across meetings, messaging, voice, and contact center. Because of this, I can still see Zoom trying to purchase a contact center solution versus building it from scratch," Walker continued. "Building an entire enterprise-grade CCaaS product would only set them back even further. Regardless, I know I'll be waiting to see what their next move in the enterprise will be."
Zoom CEO Eric Yuan also hinted at that possibility.
"While we were excited about the benefits this transaction would bring to both Zoom and Five9 stakeholders, including the long-term potential for both sets of shareholders, financial discipline is foundational to our strategy," he said in a statement. "The contact center market remains a strategic priority for Zoom, and we are confident in our ability to capture its growth potential."
But, contrary to Walker's expectations, Zoom has been working on its own contact center technology. The company is expected to release Zoom Video Engagement Center, a cloud-based contact center solution, in early 2022.
According to Yuan, Video Engagement Center will be a flexible, easy-to-use solution that connects businesses and their customers.
"We are building this new solution with the same scalability and trusted architecture that has made Zoom the platform of choice for businesses around the world," Yuan stated. "We also plan to maintain our valued existing contact center partnerships with companies like Five9, Genesys, NICE inContact, Talkdesk, and Twilio. We remain focused on driving long-term value creation for Zoom shareholders and delivering happiness to our customers through our broad-based communications platform including unified communications, developer, and events solutions."
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