Square has agreed to acquire Afterpay in a transaction valued at approximately $29 billion. Photo: Square
BUY NOW, PAY LATER
Square to Acquire Afterpay, Accelerate Growth With BNPL and Other Channels
Square, Inc., and Afterpay Limited recently announced that Square would acquire Afterpay through a scheme implementation deed. Square has agreed to acquire all of Afterpay’s issues shared by way of a recommended court-approved scheme of arrangement. The transaction has an implied value of approximately $29 billion based on the closing price of Square common stock on July 30 and is expected to be paid all in stock.
The deal strengthens two of the largest and fastest-growing global fintech companies in economic empowerment and financial inclusion.
“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,” said Square co-founder and Chief Executive Officer Jack Dorsey. “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.”
Combined, Square and Afterpay’s complementary businesses present an opportunity to drive growth across multiple strategic levers. The acquisition’s goal is to enable both companies to better deliver enhanced financial products and services to their customer base while increasing that base and increasing revenue for all merchants. The transaction is expected to close in the first quarter of 2022.
The acquisition is also expected to drive growth across multiple channels including enhancing both the Seller and Cash App ecosystems, which will bring added value, differentiation and scale to Afterpay and drive long-term growth with meaningful revenue opportunities.
“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,” said Brian Grassadonia, lead of Square’s Cash App business. “Afterpay will help deepen and reinforce the connections between our Cash App and Seller ecosystem and accelerate our ability to offer a rich suite of commerce capabilities to Cash App customers.”
Afterpay, known for bringing the buy-now, pay-later platform to the forefront of buying, will be integrated into Square’s existing Seller and Cash App business units. The idea is to give all merchants, no matter what size, the ability to use the BNPL option at checkout and give Afterpay customers the ability to manage their installment payments directly in Cash App. Afterpay will also help accelerate Square’s strategic priorities for both Seller and Cash App.
“Buy now, pay later has been a powerful growth tool for sellers globally,” said Alyssa Henry, lead of Square’s Seller unit. “We are thrilled to not only add this product to our Seller ecosystem but to do it with a trusted and innovative team.”
