Oct 01, 2021 (Baystreet.ca via COMTEX) -- Zoom's /zigman2/quotes/211319643/composite ZM +5.72% agreement to buy cloud contact center software company Five9 /zigman2/quotes/209043265/composite FIVN +2.70% was scuttled on Thursday, after Five9 shareholders rejected the deal.
Zoom said in July that it was acquiring Five9 in an all-stock purchase for $14.7 billion, its first billion-dollar-plus purchase and, at the time, the second-biggest tech deal of the year. The company has now lost an opportunity to quickly broaden its capabilities after its stock rallied during the coronavirus pandemic.
Buying Five9 "presented an attractive means to bring to our customers an integrated contact center offering," Eric Yuan, Zoom's founder and CEO, wrote in a blog post. "That said, it was in no way foundational to the success of our platform, nor was it the only way for us to offer our customers a compelling contact center solution."
A branch of the U.S. Department of Justice was reviewing the deal out of concern about potential foreign participation, according to a letter dated Aug. 27 that was sent to the Federal Communications Commission. But Zoom said last week, when news of the review was reported, that it still expected the deal to close in the first half of 2022.
Zoom went public just two years ago, and the pandemic provided a major boon to its business, as customers rushed to sign up for its video chat software. The company had $1.9 billion in cash and equivalents on its balance sheet at the end of July.
ZM shares gained $5.25, or 2%, to $266.75, while FIVN shares leaped $2.30, or 1.4%, to $161.83
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