PayPal snaps up Swedish rival iZettle for this much

Devin Lawrence
May 18, 2018

With this acquisition, which will be done in all-cash, PayPal will have a presence in stores in 11 markets, both in Europe and Latin America, BBC says.

The price being paid by PayPal - itself valued at more than $90bn (£66bn) - is double the valuation that iZettle was reported to be seeking from a listing on Nasdaq Stockholm.

Founded in 2010, iZettle gives small businesses access to the financial tools needed to compete with larger enterprises.

The acquisition "significantly expands PayPal's in-store presence, strengthening PayPal's platform to help millions of small businesses around the world grow", CEO Dan Schulman said in a statement. In today's digital world, consumers want to be able to buy when, where and how they want.

PayPal can also expand in-store capabilities to its other existing markets, as well as accelerate omnichannel commerce solutions in Australia, the United Kingdom and the US. IZettle does not now face too much direct competition from its main rival, the NASDAQ-listed Square, as the companies' operations only really overlap in the UK. It will also gain near-term in-store expansion opportunities into other existing PayPal markets, and acceleration of omnichannel commerce solutions in Australia, the United Kingdom and the US.

Until now, iZettle has mainly operated in Europe and Latin America but, with PayPal's backing, the possibility of a stronger entrance into the United States market becomes more plausible.

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IZettle has almost half a million merchants on its platform and expects to generate gross revenues of $165m (£122m) in 2018, processing total payments of around $6bn (£4.4bn). The sources say that iZettle's plan to file for IPO was what made the deal appear so quickly.

PayPal, based in San Jose, California, says Stockholm-based iZettle is on pace to process about $6 billion in payments this year.

The deal is expected to be sealed by the third quarter of this year. The completion of this transaction is subject to customary closing conditions, including regulatory approvals.

The company is still operating at a loss, according to IPO documentation.

JPMorgan Chase & Co. was sole financial adviser to iZettle, while PayPal worked with Evercore Inc.

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