The transaction failed to gain sufficient support at a Five9 shareholder meeting, and the two companies made the decision to terminate the deal.
Zoom’s acquisition of cloud contact centre software provider Five9 has been terminated by mutual agreement.
At a special meeting of Five9 shareholders held yesterday (30 September), the transaction did not receive sufficient support. This gave both companies the option to exit the agreement, which they did.
The $14.7bn deal, to be paid entirely in stock, was announced in July and would have seen Five9 continue to exist as an operating unit of Zoom.
Announcing the decision to abandon the deal, Zoom founder and CEO Eric Yuan said: “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.
“The contact centre market remains a strategic priority for Zoom, and we are confident in our ability to capture its growth potential.”
Yuan noted that at a customer conference held by the company two weeks ago, Zoom announced its Video Engagement Centre service. This will allow customer service and tech support staff to assist consumers remotely, and will launch early next year.
“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 said. “We also plan to maintain our valued existing contact centre partnerships with companies like Five9, Genesys, Nice InContact, Talkdesk and Twilio.”
In a press release, Five9 said it will now continue to operate as a standalone publicly traded company but that it will also continue its partnership with Zoom.
Zoom is increasingly seeking to expand its enterprise offerings via services such as the Video Engagement Centre and Zoom Phone. In its latest earnings call, the company beat analyst expectations but continued a trend of slowing growth as workers return to offices in many countries and use video conferencing less frequently.
On the basis of this slowing growth, analysis firm Institutional Investor Services advised Five9 shareholders to vote against the acquisition two weeks ago. It said: “The all-stock deal exposes Five9 shareholders to a more volatile stock whose growth prospects have become less compelling as society inches towards a post-pandemic environment.”
In late June, Zoom acquired German start-up Kites and said it would integrate the company’s translation technology into its communications services.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.