Square has announced plans to acquire Australian buy now, pay later company Afterpay.
The companies have entered into a scheme implementation deed, under which Square has agreed to acquire all issued shares in Afterpay using a recommended court-approved scheme of arrangement.
The transaction has an implied value of approximately USD$29 billion (AUD$39 billion) based on the closing price of Square common stock on July 30, 2021, and is expected to be paid all in stock.
According to Square, the acquisition aims to enable the companies to deliver more compelling financial products and services, expand access to more consumers, and drive incremental revenue for merchants of all sizes. The closing of the transaction is expected in the first quarter of the calendar year 2022, subject to the satisfaction of certain closing conditions.
“Square and Afterpay have a shared purpose,” says Square co-founder and CEO, Jack Dorsey.
“We built our businesses to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles. 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.”
The acquisition of Afterpay will accelerate Square's strategic priorities for its Seller and Cash App ecosystems. Square plans to integrate Afterpay into its existing Seller and Cash App business units, enabling even the smallest of merchants to offer buy now and pay later at checkout.
“Buy now, pay later has been a powerful growth tool for sellers globally,” says Square's Seller lead, Alyssa Henry.
“We are thrilled to not only add this product to our Seller ecosystem but do it with a trusted and innovative team.”
As of June 30, 2021, Afterpay globally serves more than 16 million consumers and nearly 100,000 merchants, including major retailers across key verticals such as fashion, homewares, beauty, sporting goods and others.
“The addition of Afterpay to Cash App will strengthen our growing networks of consumers around the world while supporting consumers with flexible, responsible payment options,” says Square's Cash App lead, Brian Grassadonia.
“Afterpay will help deepen and reinforce the connections between our Cash App and Seller ecosystems, and accelerate our ability to offer a rich suite of commerce capabilities to Cash App customers.”
Afterpay co-founder and co-CEO, Anthony Eisen, says combining with Square will further accelerate its growth in the U.S. and globally, offer access to a new category of in-person merchants, and provide a broader platform of new capabilities and services to its merchants and consumers.
“We are fully aligned with Square's purpose and, together, we hope to continue redefining financial wellness and responsible spending for our customers,” says Afterpay co-founder and co-CEO, Nick Molnar.
“The transaction marks an important recognition of the Australian technology sector as home-grown innovation continues to be shared more broadly throughout the world. It also provides our shareholders with the opportunity to be a part of the future growth of an innovative company aligned with our vision.”