- Square to acquire lending platform Afterpay.
- Square and Afterpay have similar purpose -Jack Dorsey.
- Cash App Q2 Bitcoin revenue grew by 200 percent.
In a move to increase its offerings as well as boost its platform, Jack Dorsey digital-payments company Square has announced its decision to acquire Australia-based fintech firm Afterpay for $29 billion.
Announcing the acquisition via an official blog post, Square noted that it was close to sealing the deal and the purchase should be finalised before the first quarter of next year. It also revealed that the agreement was based on the closing price of the digital payment common share.
According to the announcement, the acquisition of Afterpay will help Jack Dorsey’s payment platform achieve its mission of establishing a global payment ecosystem. It will boost the firm existing plan as it would gain access to Afterpay’s 100,000 merchants across the United Kingdom, Italy, Australia, the United States, France, Canada, Spain and New Zealand.
Notably, Square purchase of Afterpay once complete will become the highest-grossing takeover in Australian history. The deal would surpass Unibail-Rodamco’s $24.7 billion takeover of Westfield in 2017. Additionally, Square intends to offer the facility to its merchants and users of its Cash App.
Lauding the move analysts at Mizuho has described Square as the “bank of the future”. As a result of the acquisition, Afterpay shares has since recorded a massive increase. Also, once the acquisition is completed, Afterpay shareholders will own about 18.5 percent of Square.
Square and Afterpay have similar purpose – Jack Dorsey
Expressing his excitement with the move to acquire Afterpay, Twitter and Square CEO, Jack Dorsey in a statement said both platforms had a shared purpose.
He explained that both Square and Afterpay were built on strategic principles to ensure financial systems become more fair, accessible, inclusive and satisfactory to the general public.
Afterpay founders has also expressed delight with the deal. They noted that the agreement with Square indicates an important recognition of the Australian technology sector as the country’s innovation starts to grab International recognition.
Square has also disclosed that it will undertake a secondary listing on the Australian Securities Exchange to allow Afterpay shareholders to trade in shares via CHESS depositary interests (CDIs). Morgan Stanley advised Square on the deal, while Goldman Sachs and Highbury Partnership consulted for Afterpay and its board.
Square’s Cash App Q2 Bitcoin revenue grew by 200 percent
Also, Jack Dorsey’s platform has disclosed that its Cash App service’s Bitcoin annual revenue rose 200% to $2.72 billion from $875 million while bitcoin gross profit rallied to $55 million from $17 million.
Recall, that Bitcoin revenue and gross profit had declined from Q1. However, the firm in its Q2 report has recorded massive growth in its Bitcoin portfolio.
The results surpassed Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 32 cents per share.