When the going gets tough, it’s said, the tough get going –and that’s exactly what Australian buy-now, pay-later (BNPL) operator Afterpay has done, as it moves to dominate the ever-crowded sector by jumping into the arms of Jack Dorsey’s (pictured) and his payments platform, Square.
And in a Monopoly-style move to Square, Afterpay collects $39 billion, said to be the biggest buyout of an Australian company.
The offer is a more than 30 percent premium on Afterpay’s Friday ASX closing price.
The agreement will create an instalments payment giant, as the industry sees significant growth.
“Square and Afterpay have a shared 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,” Dorsey said yesterday.
The Australian outfit said its board had unanimously recommended the deal to its shareholders, who are expected to own around 18.5 percent of the new company.
No one is denying it is the right deal at the right time for Afterpay, which has been working in unison with Square in the US for some time.
Afterpay has more than 16 million customers, and is used by 100 million businesses around the world.
The agreement means Afterpay will be able to expand more quickly in the US, where sales have nearly tripled in the last 12 months to $8.15 billion.
The ASX and local venture capital investors are eyeing the potential flow-on effects of the buyout.
Max Cunningham, group executive for listing at the ASX, is hoping the deal will establish the Aussie exchange as a global listing destination for fast-growth tech stocks.
Cunningham said Monday’s deal should now lead to much wider-spread appetite among US founders to target the ASX to fund their growth.
