Split payment always arouses more appetite. American Square, founded by Twitter boss Jack Dorsey, is about to sign a check for 24 billion dollars to afford the Australian Afterpay, one of the world leaders in split payment , the two companies announced on Sunday.
With this acquisition, which has yet to obtain the approval of the shareholders of Afterpay, Square could sign the largest acquisition in its history. This transaction could also be the most important ever known by the Australian continent, by dethroning the takeover of Westfield by Unibail-Rodamco in 158 (24, 7 billion).
With this merger, Square, which first developed into marketing small mobile payment terminals, made a giant leap in the fractional payment sector (also called Buy now pay later) by offering the 10 millions of Afterpay customers, bringing the number of American customers to 86 millions. A serious advantage in an industry where economies of scale are decisive.
Stock exchange Concretely, the marriage between the two companies will take place entirely by exchange of shares, details the press release. At the end of this operation, the shareholders of Afterpay will own 16, 5% of the capital of the new company, which could see the light of day in the first quarter 2022.
To convince the shareholders of Afterpay, Square is offering a 30% premium higher than the Australian’s share price, i.e. 126, 21 Australian dollars. A price however lower than 158, 45 displayed by the peak valuation posted by Afterpay last February. On Monday, Afterpay’s share price was up nearly 18%.
Split payment boom This giant operation illustrates the worldwide craze for payment solutions split , which allow buyers to stagger their spending. This service has experienced an insane surge for two years, accelerated by the pandemic and the rapid development of online commerce. In a few months, e-merchants of all sizes have acquired these solutions which increase the size of their average basket.
As a result, payment companies offering these solutions have seen their valuation explode. This is the case of Afterpay, which recently launched in France, but also of its main competitor, the Swede Klarna, which in just over a year, saw its valuation go from 10 billions of dollars at 45 billion last June, during its last fundraiser .
Even young shoots in the sector, like the French start-ups Alma and Pledg have benefited from the popularity of this payment solution, allowing them to sign major fundraisers.
