August 2, 2021
Twitter co-founder Jack Dorsey’s settlement company Square offers a 30% premium on Australia’s largest share exchange transaction on Monday, buy now and pay later (BNPL) Pioneer’s afterpay Said he agreed. -Acquisitions so far.
NS The $ 29 billion deal creates a global trading giant with the largest acquisition of an Australian company.
The acquisition underscores the popularity of a business model that overturns consumer credit by allowing shoppers to charge merchants to provide small point-of-sale loans that bypass credit checks and repay in interest-free installments.
Also, afterpay (as Clearpay), whose stock price traded below A $ 10 in early 2020, then surged as a Covid-19 pandemic, with exciting payments to workers stuck at home. Also operates) to fix the amazing stock price movements. Rapid transition to online shopping.
The two companies said in a joint statement on Monday that the acquisition of all shares would bring the value of the shares to A $ 126.21 ($ 92.65).
This means that Afterpay founders Anthony Eisen and Nick Molnar will each have a payday of A $ 2.46 billion.Chinese Tencent Holdings, which paid A $ 300 million for 5% of afterpay in 2020, will put A $ 1.7 billion in its pocket.
“Getting Afterpay is a proof-of-concept moment to buy now, pay later, validate the industry, and create a formidable new competitor for Affirm Holdings. PayPal With Holdings Clarna“Truist Securities analysts said.
“Square expects to integrate Afterpay and make significant investments to accelerate organic revenue growth.”
Afterpay stocks were slightly higher than Square’s list purchase price in early trading, settling at A $ 116.51 just below it by mid-afternoon, rising 20.55% and pushing up the wider market by 1.4%.
“We built our business to make our financial system fairer, more accessible and more comprehensive. Afterpay has built a credible brand that follows these principles,” said Dorsey. Stated in a statement.
“Together, we can better connect our … ecosystem, provide merchants and consumers with more attractive products and services, and bring power back into their hands. “
The founder of Afterpay said the deal was “an important recognition that Australia’s technology sector continues to be more widely shared around the world as its own innovation.”
The deal, which surpassed the historical record of the completion of the acquisition of Australia, which sold Westfield’s global shopping mall empire to Unibail-Rodamco for $ 16 billion in 2018, also boosted stake in rival BNPL player Zip Co by 7.53%. I did.
Afterpay also competes with Sweden-based unlisted Klarna and new products from US veteran online payment provider PayPal Holdings.
Founded in 2014, Afterpay is pioneering the niche non-credit-checked online payments sector that became mainstream last year as more people, especially young people, choose to pay in installments for their daily necessities during a pandemic. BNPL businesses lend shoppers immediate funds, typically up to thousands of dollars, euros, or pounds. It can be paid interest-free.
They generally make money from merchant fees and late fees rather than paying interest, so they avoid the legal definition of credit, and therefore credit law.
This means that BNPL providers, unlike credit card companies, do not need to perform a background check on a new account and typically only require the applicant’s name, address, and date of birth. Critics say it will target the system for easier scams.
Deregulation, soaring popularity, and rapid user adoption have reportedly led to rapid growth and even impetus for this sector. Apple Start the service.
For afterpay, the deal with Square brings a large customer base to the United States, a major target market, and 2021 sales almost tripled to A $ 11.1 billion on a constant currency basis. rice field.
“It looks like a closed deal, unless you have a good suggestion,” said Phillip Chippindale, an analyst at Ord Minnett. “It offers significant benefits, including Square’s Seller and Cash app products.” rice field.
Negotiations between the two companies began over a year ago, and Square was convinced that it had no rivals, said someone who knew the deal directly.
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Buy Afterpay for $ 29 Billion Like Buy Now and Pay the Boom Later
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