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Aussie BNPL Provider Zip Buy US Competitor Sezzle

Zip has entered into a definitive agreement to acquire fellow BNPL operator Sezzle in an all-share deal.

The company will raise capital to the tune of almost A$200, with investors injecting A$148.7 million, with a further $50 million from a share purchase plan at $1.90 a share.

The all-stock takeover values US-based Seezle at A$491 million, and will see 222.3 million new shares issued.

Both companies were placed in a trading hold this morning as the deal was finalised.

Zip CEO Larry Diamond says the takeover will “deliver immediate scale and enhanced growth, which will support our path to profitability.

“Combining with Sezzle positions us as a leading global BNPL provider and prioritises our ability to win in the important US market,” he said.

Sezzle CEO Charlie Youakim said the deal “will position us to win in the US and globally.”

Zip has enjoyed mixed results for the first half of FY22, today reporting an 89 per cent revenue leap, to $302.2 million, with users up 74 per cent, to 9.9 million.

Transaction volumes also swelled by 92 per cent, leaping from the first half FY21 earnings of $2.32 billion to $4.44 billion.

Operating income was up nearly 89 per cent to $301.3 million.

However, the company posted an intermin loss of $172.8 million, with cost of sales blowing out from $82.8 million to $242.2 million.

The company’s acquisitions of Spotii and Twisto, coupled with bad debts and credit losses hit the bottom line.

 



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