Shares of Zoom Video Communications rose on Monday, after Bank of America made the stock its top pick following its deal to buy Five9.
Analyst Daniel Bartus said that Zoom and Five9 together would be the “strongest UCaaS/CCaaS (unified communications as a service/contact center as a service) combination” in the market.
"While it is early for enterprises to consider UCaaS and CCaaS together, we believe the trend of bundling is increasing and the long-term value of integrating both technologies is attractive," Bartus noted.
Last week, Zoom announced the purchase of Five9 for just under $15 billion. Under the terms of the deal, investors in Five9 will get 0.55 of a Zoom share for each of their holdings, which represents a 12.8% premium to their Friday closing price and a 23 times multiple to Five9's projected 2022 sales of $650 million. According to the companies, the acquisition will expands Zoom's total addressable market by around $24 billion.
Bartus indicated that the combined entity will be a competitor to company like RingCentral and 8x8.