Five9 will remain independent — its deal to be acquired by Zoom is off. Though a press release from Five9 says it was “terminated by mutual agreement,” it’s also the case that Five9 shareholders rejected the $14.7 billion deal.
Zoom originally announced the acquisition on July 18th. Five9 automates managing customer contacts for businesses, and the deal was supposed to bolster Zoom’s business offerings. Its major competitors are behemoths like Microsoft and Google, and the deal would have helped the smaller company expand.
This was supposed to be an all-stock transaction, but unfortunately for Zoom, its stock price has lost more than a quarter of its value since they announced the acquisition. Usually, when a company is bought, shareholders receive a premium over their stock price; because this was an all-stock deal, however, Zoom would be picking up Five9 at a discount.
Earlier this month, Institutional Shareholder Services, an independent proxy advisor, recommended shareholders vote against the deal. The government also had a thing or two to say about possible national security risks, which probably didn’t help matters.
In a blog post published Thursday, Zoom CEO Eric Yuan says the failed acquisition won’t significantly affect Zoom’s plans. Five9 “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,” he said. Zoom plans to keep its “long-standing partnerships” with Five9 and other companies that offer similar services.