Zoom failed with plans to purchase billions

Released on 01.10. 2021

  • Zoom’s plans to establish itself faster in the call center business with a billion-dollar acquisition are failed. Photo: Andre M. Chang

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When Zoom announced in the summer that it would only pay for its largest acquisition to date with its own shares, it looked like a clever way to go from the price increase in the Pandemic benefit. Now the deal is off.

San Jose (dpa) – Zoom’s plans to establish itself faster in the call center business with a billion-dollar acquisition have failed.

The shareholders of Company Five9, which Zoom wanted to swallow, rejected the deal, as the companies announced on Friday night. The purchase agreement was therefore terminated.

Zoom had announced the takeover of Five9 in July and wanted to use its shares, which had risen in the pandemic, as currency to pay the purchase price of 14, $ 7 billion (12, 5 billion euros). However, since then the price of Zoom papers has fallen by more than a quarter – from around 362 to recently good 261, 50 dollars. This made the deal less lucrative for the shareholders of Five9, even if their company lost around a tenth of its value during the time on the stock exchange that the US government announced an intensive review of the acquisition. A special committee led by the Justice Department investigated whether the deal posed risks to US national security.

Five9 is a specialist in call centers operated in the cloud. With the purchase, Zoom could have expanded its business beyond video conferencing. Zoom CEO Eric Yuan assured in a blog post that the setback would not affect Zoom’s plans to expand the business, as Five9 was not critical to the platform’s success.

Five9 boss Rowan Trollope announced that he would soon present plans for the further strategy as an independent company. Five9 offers software that uses artificial intelligence to help companies answer customer inquiries.

Even private individuals have been using Zoom since the crisis

Zoom had risen to a new league with the Corona crisis. The company was originally supposed to provide video conferencing for companies. In the pandemic, however, it was not just use in companies that increased: Private individuals also use Zoom for all sorts of occasions – from family reunions to yoga classes.

After leaps in sales of more than 300 percent in the past year, growth has normalized. Zoom therefore tries to use the tailwind to expand its business. Among other things, the plan is to take over the provision of telephony in companies in addition to video conferences.

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