Zip to acquire BNPL competitor Sezzle in $491 million deal

Zip Co founder and chief Larry Diamond. Source: supplied. Photographer: Wesley Nell.

Aussie BNPL giant Zip is set to acquire SME-focused competitor Sezzle, in a deal valued at $491 million.

The all-scrip transaction will see Sezzle shareholders receive 0.98 Zip shares for each Sezzle share. Based on the trading price of Zip shares, that means the deal values Sezzle at approximately $491 million.

On the closing of the deal, Sezzle shareholders will own approximately 22% of the combined company.

While listed on the ASX, Sezzle is headquartered in the US, and focuses on the SME market in the States.

The business is also a registered B Corp, with a mission to “financially empower the next generation”.

The news follows speculation that Zip may be fielding a takeover bid of its own, from a foreign buyer, after it delayed the release of its half-yearly results.

The transaction has been unanimously approved by both companies’ boards of directors, and is expected to be finalised in Q3 of the 2022 calendar year.

In a statement, Zip co-founder and chief executive Larry Diamond said the acquisition would “deliver immediate scale and enhanced growth”, while putting the fintech on a path to profitability.

While Zip reported record revenues of $302.2 million for the six months ending December 31, up 89% year-on-year, gross profits were down by 23%.

The business reported a loss after tax of some $214.3 million.

“Combining with Sezzle positions us as a leading global BNPL provider and prioritises our ability to win in the important US market,” Diamond added.

Charlie Youakim, co-founder and chief of Sezzle, echoed that the transaction will support expansion into the US, while adding that the acquisition is a “great cultural fit for both organisations”.

Combined, Zip and Sezzle are available at some 60,500 merchants in the US, and are used by about 8.8 million customers.

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Close
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Show
Forgot your password?

Want some assistance?

Contact us on: support@smartcompany.com.au or call the hotline: +61 (03) 8623 9900.