Jack Dorsey's Square To Acquire Australia's Afterpay For $29 billion

Square Inc., Jack Dorsey's fintech company, said it has agreed to buy Afterpay Ltd., an Australian-based company, in an all-stock transaction for $29 billion.

This is the largest acquisition by the San Fransisco based company as it seeks to expand its consumer lending. The purchase is expected to close in the first quarter of 2022.

Afterpay is a company that lets consumers purchase items on credit and pay later with a series of instalments. The Australian company had a market value of about A$27.9 billion at Friday’s close.

Square recently launched its banking operations, including checking and savings accounts for small businesses, and offers loans. The addition of Afterpay gives the digital payments company a chance to expand into consumer lending, which it doesn’t currently offer.

Afterpay was founded in 2015 in Sydney and now has more than 700 employees globally, according to its website. The company lets consumers buy things on credit, and pay back the loan over four payments. There are no fees or interest on the loan assuming people pay on time, according to the website.

Afterpay shareholders will get 0.375 shares of Square class A stock for every share they own, implying a price of about A$126.21 per share based on Square’s Friday close, the companies said in a joint statement.

The offer price is a more than 30% premium to Afterpay’s last close and the Australian firm’s shareholders are expected to own about 18.5% of the combined company.

Separately, Square reported a jump of more than 143% in its total net revenue for the second quarter.

The payments firm, led by Twitter boss Jack Dorsey, posted total net revenue of $4.68 billion for the quarter ended in June, compared to $1.92 billion last year.