The planned deal between Zoom and Five9 has failed

In mid-July, we reported on Zoom’s planned deal with Five9. Now that doesn’t work. The deal between Zoom and Five9 failed.

Why did the deal between Zoom and Five9 fail?

Negotiations were interrupted because, among other things, the Zoom share price fell sharply (about 25%).

The official justification according to Heise.de:                                                                                               “Zoom’s plans to establish itself in the call center business with a billion-dollar acquisition have collapsed. In July, Zoom made a takeover offer for Five9. Five9 is a Californian cloud software provider for call centers. In the event of a takeover, each Five9 share would have been exchanged for 0.5533 Zoom shares. However, this offer did not find the necessary approval among the Five9 owners.”

The planned deal between Zoom and Five9 has failed – US government can thus also cancel the investigation

Heise continues: “An inter-ministerial working group led by the Ministry of Justice had initiated a review of the acquisition of Five9. The working group should determine whether the acquisition of the California company poses a risk to national security or other law enforcement interests.

The background is that Zoom is said to have strong ties to the People’s Republic of China, not only through shareholders and programmers.”

Zoom had already fallen into disrepute because of servers in China at the beginning of the boom. So it remains to be seen whether this actual or alleged proximity will further influence the next plans.

Deal failed – but cooperation continues

“Zoom and Five9 will continue their previously announced partnership, which includes supporting integrations between their respective Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) solutions, as well as joint go-to-market efforts.

In a separate announcement available on the Company’s website under http://investors.five9.com/ in the Investor Relations section, Five9 highlights its strong foundation and significant opportunities as a standalone company.”  Translated with www.DeepL.com/Translator (free version)

Result:

Is this the quick end of a hype? Paying with shares often works, but not always. In order to get this deal off the ground, there was too little cash on board. Has the management speculated?

In the context of the mixed situation, the result is probably good for both sides. Zoom does not take over with the megadeal. Five9 can continue to operate alone, but in cooperation with Zoom.

Note: This is a machine translation. It is neither 100% complete nor 100% correct. We can therefore not guarantee the result.