Twitter co-founder Jack Dorsey’s digital payments platform Square has agreed to take over the Australian ‘buy now, pay later’ firm Afterpay.
This deal, valued at $29bn (A$39bn; PlayStation 21bn), is Australia’s largest-ever buyout.
This offer offers a 30% discount on Afterpay’s Friday stock market close price.
As the industry experiences significant growth, this agreement will lead to a giant instalments payments company.
Afterpay and Square share a common purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” Square co-founder and chief executive Jack Dorsey said in a statement.
According to the Australian company, its board unanimously recommended that the deal be done to shareholders. They are likely to hold around 18.5% in the new company.
Afterpay was founded in 2014 by Australians Nick Molnar & Anthony Eisen. It is currently used by more than 100 million companies around the globe.
Afterpay is a good indicator of future prospects in the no-credit check online payments niche. It exploded in popularity as more people, particularly young, chose to make instalments and pay for their everyday goods during the coronavirus epidemic.
Afterpay can now expand in America faster thanks to the agreement. The company’s most recent annual sales figures show that US sales nearly tripled between 2008 and 2011, to $8.15 billion.
At the same time Square announced second quarter earnings that showed gross profit rose 91% to $1.14bn compared to the same period a year ago.
In Sydney, Afterpay shares traded more than 20% higher Monday.
Due to its popularity and rapid uptake, users have been quick to adopt the industry. There is also relatively little regulation. This has allowed for rapid growth in the Buy Now, Pay Later (B2P) sector.
Recent reports have indicated that Apple, the technology company that dominates all of tech companies has been working to create a service where customers can pay in installments for their purchases.
Publiated at Mon, 02/02/2021 13:27:12 +0000