Five9 shareholders voted against the $14.7 billion merger deal with videoconferencing giant Zoom. Five9 didn’t disclose the full reason for the decision. However, there are some factors that might indicate why the deal didn’t go forward.
Five9 announced the move in a statement at the end of September 2021, saying that the termination was a mutual agreement reached between the two companies.
For its part, Zoom still seemed optimistic about the deal earlier the same month.
The two companies will maintain their existing partnership.
Five9 is a cloud-based Contact-Centre-as-a-Service company, and Zoom is a video conferencing platform. Both are based in California, but the latter has offices in Europe, Australia, and Asia too.
Zoom faces scrutiny for its links to China, as it was found to be routing info through the country.
Another fact to consider is that Zoom stocks have steadily dropped over the past year. From July to September, their value dropped by 34.5%, from $400 to $262.
Zoom made massive gains as Covid-19 lockdowns pushed the workforce online. The return to in-office working appears to account for the slump.
The cloud tech industry has been thriving during the pandemic, as companies have hurried to make the switch.
Zoom planned to strengthen its cloud capabilities with the merger. The company is also aware of the lower need for its core feature due to in-person work resuming. As such, it hopes to diversify its offerings. A successful merger would have seen it enter the customer experience management space.
While the Five9 deal is off, Zoom hasn’t given up on that overarching goal. To that end, it plans to roll out a cloud-based Video Engagement Center in early 2022.
This new tool will allow service agents to talk to customers in real-time over video. Whether Zoom succeeds with this expansion remains to be seen.