(Reuters) – Verizon Communications Inc (VZ.N) on Thursday agreed to purchase BlueJeans Community Inc, a rival of Zoom Video Communications Inc (ZM.O), for lower than $500 million because it seems to be to faucet into the new-found reputation of video-conferencing apps.
FILE PHOTO: A person stands subsequent to the brand of Verizon on the Cell World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez
Shelter-in-place orders to comprise the unfold of the brand new coronavirus have pushed corporations to undertake information methods of doing enterprise, resulting in a surge in demand for video-conferencing apps resembling Zoom, Cisco’s (CSCO.O) Webex and Microsoft’s (MSFT.O) Groups.
BlueJeans co-founder and Govt Chairman Krish Ramakrishnan mentioned the deal was negotiated over the last three months primarily utilizing the corporate’s video-conferencing software.
“That is the brand new norm,” he mentioned, referring to how the deal was clinched in a digital setup that additionally included using e-signatures.
The corporate is already a accomplice of Verizon, with the assembly app being supplied to clients below the telecom firm’s unified communications and collaboration providers.
“Verizon received a very good deal, however BlueJeans had been making an attempt to promote itself for months,” Piper Sandler analyst James Fish mentioned.
The deal comes at a time when rival Zoom has seen its reputation surge, with its each day lively customers hovering to 200 million from about 10 million earlier than the pandemic began to unfold. Zoom has a market valuation of $42 billion.
Ramakrishnan mentioned BlueJeans was not capable of bolster its gross sales and advertising and marketing previously because it wanted extra capital.
“Within the final month, we’ve been rising, however we would have liked extra capital to develop and it was higher for our clients and our staff that we joined forces with Verizon,” he mentioned.
The deal, first reported by the Wall Road Journal, is predicted to shut within the second quarter. Evercore and Goodwin Procter had been advisers to BlueJeans, whereas Debevoise & Plimpton was adviser to Verizon.
Verizon would combine BlueJeans into its 5G product plan, aiming to faucet areas resembling telemedicine and distance studying, mentioned Tami Erwin, group CEO of Verizon Enterprise.
Reporting by Supantha Mukherjee and Munsif Vengattil in Bengaluru; Enhancing by Saumyadeb Chakrabarty, Bernard Orr and Anil D’Silva