Twitter co-founder Jack Dorsey’s Square to buy Aussie afterpay in $ 29 billion all-stock deal

Square– controlled by Twitter co-founder Jack Dorsey – said on Monday he had agreed to buy the Australian fintech company After payment for $ 29 billion in a full-fledged deal that promises to create a global payments giant.

As part of the deal, Afterpay said its shareholders will receive 0.375 Class A common share of Square for each Afterpay share held, valuing each Afterpay share at A $ 126.21 ($ 92.78), a premium of $ 30. , 6% from last Friday’s closing price. Square can choose to pay 1% of the total consideration in cash.

“We built our business to make the financial system more fair, accessible and inclusive, and Afterpay has built a brand of trust aligned with these principles,” Dorsey said in a statement. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more engaging products and services to merchants and consumers. “

Since its inception in 2015, Afterpay has revolutionized the consumer credit industry by allowing people to pay for low cost items such as clothing in four interest free installments. The bulk of Afterpay’s revenue comes from the 4-6% fees it charges retailers for each transaction.

The buy now, pay later program gained popularity during the height of the Covid-19 pandemic last year, as consumers – who were stuck in their homes as governments imposed lockdowns to curb the spread of the coronavirus – have turned to online shopping.

Afterpay co-founder and CEO Nick Molnar says millennials have a “total aversion” to credit cards because they can lead to increased debt. In 2014, he teamed up with his then neighbor, Anthony Eisen, former chief investment officer of Australian holding company Guinness Peat Group, to pursue their fintech startup.

They took the company public in April 2016, listing it on the Australian Stock Exchange. Afterpay claims to have more than 16 million customers and nearly 100,000 merchants worldwide using its services, as of June of this year. Its platform is available in Australia, Canada, France, Italy, New Zealand, United Kingdom, United States and Spain.

The deal will further increase the fortunes of Afterpay’s two co-founders. With a net worth of $ 1.8 billion each, Eisen and Molnar were ranked No.28 and No.29, respectively, among Australia’s richest individuals when the list of global billionaires was released in April.