‘Buy now, pay later’ giant Afterpay has been bought out in a deal worth $29 billion (£21 billion) by digital payments platform Square.
Square, which shares its co-founder and chief executive Jack Dorsey with Twitter, agreed to buy Afterpay at a 30 per cent premium making it the biggest buyout in Australian history.
Afterpay shareholders will also receive 0.375 shares of Square stock for every share in Afterpay they own making the deal an “expensive purchase”, according to retail analyst Neil Saunders.
However, Saunders added that the deal was a reflection of the intense appetite for BNPL companies, which have seen adoption nearly triple since the start of the pandemic.
“The buy now, pay later market is growing very rapidly and it makes a lot of sense for Square to have a solid stake in it,” he added.
The deal, which is expected to be finalised in early 2022, comes after a year of staggering growth from Afterpay which is now used by over 100,000 retailer across the US, Canada, Australia, New Zealand and much of Europe.
Meanwhile Square reported revenues of $4.7 billion over its second quarter, achieving profits of $204 million and handling over $40 billion in payments.
Dorsey said of the deal: “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.”