BY Fraser Tennant
Bringing together two of the fastest growing global FinTech companies, US payments company Square is to acquire Australian ‘buy now, pay later’ lending provider Afterpay in a $29bn all-stock transaction.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, Afterpay shareholders will receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay ordinary share.
Afterpay’s global merchant base will accelerate Square’s growth with larger sellers and expansion into new geographies, while helping to drive further acquisition of new Square sellers.
“Afterpay has built a trusted brand,” said Jack Dorsey, co-founder and chief executive of Square. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
An industry leader with a best-in-class product and strong cultural alignment with Square, Afterpay serves more than 16 million consumers and nearly 100,000 merchants globally, including major retailers across key verticals such as fashion, homewares, beauty, and sporting goods.
“By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new services to our merchants and consumers,” said Anthony Eisen, co-founder and co-chief executive of Afterpay. “We are fully aligned with Square’s purpose and, together, we hope to continue redefining financial wellness and responsible spending for our customers.”
Afterpay's co-founders and co-chief executives will join Square upon completion of the transaction and help lead Afterpay’s respective merchant and consumer businesses, as part of Square’s Seller and Cash App ecosystems.
“The transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world,” added Nick Molnar, co-founder and co-chief executive of Afterpay. “It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.”
The transaction is expected to close in the first quarter of 2022, subject to the satisfaction of certain closing conditions.
Mr Dorsey concluded: “Square and Afterpay have a shared purpose: building our business to make the financial system more fair, accessible and inclusive.
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