Home BUSINESS News ZoomInfo Technologies Using New Financing to Help Pay for AI Startup

ZoomInfo Technologies Using New Financing to Help Pay for AI Startup

0
ZoomInfo Technologies Using New Financing to Help Pay for AI Startup

[ad_1]

Business-intelligence platform ZoomInfo Technologies Inc. raised about $500 million in debt on Tuesday and plans to use some of the funds to buy an artificial-intelligence startup, a deal that comes on the heels of a record-breaking first half of the year for mergers and acquisitions involving U.S. companies.

Vancouver, Wash.-based ZoomInfo, which helps sales and marketing teams improve their pitches to potential customers, said it would acquire Chorus.ai, a company that uses machine learning and AI to capture and analyze customer calls, meetings and emails. ZoomInfo, which went public last June, agreed to spend about $575 million in the transaction. It is the company’s fourth deal since it listed on Nasdaq.

ZoomInfo Technologies CFO Cameron Hyzer



Photo:

ZoomInfo Technologies

Companies have been on a buying spree, spending $1.74 trillion on mergers and acquisitions that involved U.S. businesses in the first half of the year. That is up from $511.79 billion during the year-ago period and $1.28 trillion in the first six months of 2019, before the pandemic, according to data provider Refinitiv, which began tracking deals in 1980. The total number of deals with U.S. involvement, at 9,725, also was higher than in the comparable periods in 2020 and 2019, Refinitiv said.

ZoomInfo plans to offer Chorus’s services alongside its own application to customers and expects to expand its overall revenue and customer base, said

Cameron Hyzer,

ZoomInfo’s finance chief. “We feel that our sales force can use this and sell this alongside the ZoomInfo platform,” Mr. Hyzer said. Chorus is based in San Francisco and has about 170 employees.

ZoomInfo, which isn’t related to meeting platform provider

Zoom Video Communications Inc.,

sold $300 million in bonds that mature in 2029 and agreed to a $200 million term loan that will expire in 2026, Mr. Hyzer said. About $225 million of this will be used to pay back a revolving credit facility that ZoomInfo drew down on for short-term funding of the deal.

The company will use another $75 million in cash from its balance sheet to pay for the transaction, he said. “Our ability to raise debt is pretty strong,” Mr. Hyzer said, adding that financing conditions in the market have been supportive.

Near-zero short-term interest rates, monetary stimulus from the Federal Reserve and strong investor demand for corporate debt have added to companies’ financial fuel. Highly rated U.S. companies raised $817.16 billion in debt in the first six months of the year, down from $1.24 trillion in the year-earlier period, but still up compared with the first half of 2019, according to Refinitiv.

ZoomInfo, which had a ratio of net debt to earnings before interest, depreciation, tax and amortization of 1.5 before the transaction, will see its leverage go up to more than three, Mr. Hyzer said. The company reported $433 million in net debt at the end of the first quarter, down from $494.4 million at the end of 2020, according to S&P Global Market Intelligence.

ZoomInfo booked $153.3 million in revenue in the first quarter, up 50% from a year earlier. “The growth allows us to deleverage quickly,” Mr. Hyzer said, pointing to the company’s revenue growth in recent quarters. Chorus is expected to add a single-digit million-dollar figure to ZoomInfo’s revenue during the second half of the year, he said.

Analysts at financial services firm Raymond James said the deal could drive synergies for ZoomInfo’s customers and expand the company’s value proposition. “We wouldn’t be surprised to see incremental upside from Chorus.ai over the next several years,” the analysts said in a note to clients.

Write to Nina Trentmann at Nina.Trentmann@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

[ad_2]

Source link