Five9 comes out looking stronger than Zoom in the aftermath.

Edward Gately, Senior News Editor

October 1, 2021

6 Slides

With Zoom and Five9 terminating their merger agreement, the companies now face differing market perceptions going forward.

That’s according to Jon Arnold, principal of J Arnold & Associates. We asked Arnold and other industry experts for their take on why this deal imploded.

In a surprise move late Thursday, the companies announced they mutually agreed to terminate the deal.

The announcement came after Five9’s shareholders rejected the merger  at a special meeting. Five9 will continue to operate as a standalone publicly traded company.

In July, Zoom and Five9 disclosed the $14.7 billion transaction. Through the acquisition, Zoom could extend its global communications network with a cloud-based contact center as a service.

Zoom has since announced its Zoom Video Engagement Center, a cloud-based contact center solution. It will launch in early 2022.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

Arnold said it’s important to remember that Five9 rejected Zoom’s acquisition offer.

Arnold-Jon_J-Arnold-and-Associates.jpg

J Arnold & Associates’ Jon Arnold

“The fact that Five9 turned down [Zoom] tells you how much they believe in their future,” he said. “They’re in a position of strength. If somebody wants to buy them in the future, it will cost a lot more because they turned down Zoom. Zoom needs them more than Five9 needs Zoom.”

Other providers have gained new capabilities through partnerships, Arnold said. However, as with Zoom and RingCentral, sometimes these partnerships don’t work out.

“That’s why Zoom wanted to buy,” he said.

While Five9 emerges looking strong, the failed merger doesn’t leave Zoom unscathed, Arnold said.

Our slideshow above has more analysis of the terminated merger.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Edward Gately or connect with him on LinkedIn.

Read more about:

Agents

About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like