Square is planning to acquire Afterpay in a $29 billion all-stock deal that is expected to close in the first quarter of 2022.
The point of sale solution provider noted that the acquisition will help improve access to financial products and services while driving incremental revenue for merchants of all sizes.
“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,” said Square’s CEO Jack Dorsey.
The acquisition will help Square stay ahead of consumers’ shift away from traditional credit options and better appeal to millennials and Gen Z consumers, who are increasingly gravitating toward flexible payment options. Moreover, Afterpay’s global merchant base will help Square expand into new geographies and drive the acquisition of new sellers.
Afterpay customers, meanwhile, will be able to manage their repayments and discover new merchants once the Afterpay app in integrated into Square’s Cash App, according to a company announcement.
According to the terms of the deal, Afterpay’s co-founders Nick Molnar, 31, and Anthony Eisen, 49, will both pocket $1.8 billion and will stay on with the company.
The Australian BNPL provider has seen rapid growth over the course of the last two years. In May 2020, the company bagged an investment from Chinese eCommerce giant Tencent, following a significant increase in demand and usage at the start of the pandemic.
In October 2020, the company’s shares broke through A$100 and in February this year they hit A$160, according to Reuters.
While the company is yet to turn a net profit, it is today’s one of Australia’s 20 largest companies.