By Natalie DeCoste

Zoom, one of the pandemic’s biggest winners, announced on Sunday that it is buying Five9, a provider of cloud contact center software, in a move to expand beyond communication software.

The company announced that it entered into a definitive agreement to acquire Five9 in an all-stock transaction valued at approximately $14.7 billion. This deal marks Zoom’s first billion-dollar acquisition.

Zoom is a well-known communication platform that gained prominence when the pandemic pushed many companies and schools online. Five9 is a leading company for cloud-based contact center software. The company is a highly scalable and secure cloud contact center that delivers a full range of easy-to-use applications that allows management and optimization of customer interactions across many different channels.

This acquisition will help Zoom enhance its presence with enterprise customers and accelerate its long-term growth opportunity by adding the $24 billion contact center market.

“We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers. Zoom is built on a core belief that robust and reliable communications technology enables interactions that build greater empathy and trust, and we believe that holds particularly true for customer engagement,” said Eric S. Yuan, Chief Executive Officer and Founder of Zoom.

In recent months, Zoom increased its efforts to ensure the company will continue to grow even as the effects of the pandemic diminish. Zoom was one of the top growth stories in the 16 months since the start of the pandemic. The company expanded its revenue by 326% in 2020, meaning it faces a natural slowdown in the coming months.

“The trend towards a hybrid workforce has accelerated over the last year, advancing contact centers’ shift to the cloud and increasing demand by customers for customized and personalized experiences,” said Yuan.

On Friday, Five9 closed with a market cap of $11.9 billion, or $177.60 a share. Zoom said that Five9 stockholders would receive 0.5533 shares of Zoom Video Communications for every Five9 share. That values Five9 at a 13% premium of $200.28 a share and represents about 14% of Zoom’s market cap of nearly $107 billion.

Five9 also saw rapid growth throughout the pandemic. The company’s revenue climbed 33% to $435 million last year as demand for call center technology that would allow representatives to do their jobs from home surged.

“Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers. It has always been Five9’s mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way. Joining forces with Zoom will provide Five9’s business customers access to best-of-breed solutions, particularly Zoom Phone, that will enable them to realize more value and deliver real results for their business,” said Rowan Trollope, Chief Executive Officer of Five9.

This deal will offer both companies significant cross-selling opportunities and help Zoom to retain its position as the nexus between companies and their customers in the digital age.