SYDNEY, AUSTRALIA: Zip Co Limited (ASX: Z1P) has entered into a definitive agreement to acquire Sezzle Inc. in an all-scrip transaction by way of a statutory merger under the laws of the State of Delaware.
Subject to the satisfaction or waiver of specified closing conditions, Sezzle stockholders will be entitled to receive 0.98 Zip ordinary shares for every share of Sezzle common stock owned.
The total consideration for the Sezzle shares in the proposed transaction represents an implied value of Sezzle of approximately A$491 million (based on the trading price of Zip ordinary shares on the Australian Securities Exchange (ASX) as of the close at 25 February 2022.
The proposed transaction values Sezzle at a 22.0% premium based on current spot prices of A$1.78 (Sezzle) and A$2.21 (Zip) as of 25 February 2022, and a 31.7% premium based on a 30-day volume weighted average price (VWAP) of Sezzle’s common stock on the ASX.
Upon implementation of the transaction and the placement, Zip shareholders will own approximately 78% of the combined group and Sezzle stockholders will own approximately the remaining 22%.
Closing of the Proposed Transaction is expected to occur by the end of the third quarter of CY2022.
Zip also announced a A$148.7 million fully underwritten placement to eligible institutional, professional and sophisticated investors, and a non-underwritten share purchase plan to eligible Zip shareholders in Australia and New Zealand to raise up to A$50 million.
Zip is a leading global “buy now, pay later” (BNPL) provider, creating innovative, responsible and fair payments products that help businesses grow and allow consumers to take control of their finances.
With a footprint across 14 geographies, Zip is a global leader in digital retail finance and payments. Zip offers innovative solutions and people-centred products that connect millions of customers with its global network of tens of thousands of merchants.
Sezzle, a certified B Corp headquartered in the United States and listed on the ASX, is a U.S. BNPL player with strength in small and medium businesses (SMB) supported by omni-channel solutions.
Sezzle’s payments platform increases the purchasing power for millions of consumers by offering interest-free installment plans at online stores and in-store locations.
Sezzle also has a long-term installment capability off balance sheet supported by its proprietary technology, and pioneered Sezzle Up, a product that allows users to buy now, pay later while building their credit scores.
The combination of Zip and Sezzle is expected to result in pro forma 8.8 million customers and pro forma 60.5k merchants in the U.S.
“We are delighted to be bringing Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability. Combining with Sezzle positions us as a leading global BNPL provider and prioritises our ability to win in the important U.S. market,” said Larry Diamond, Co-Founder and Global CEO of Zip.
“We are extremely excited about the opportunity to create a leader in the financial services industry by combining with Zip and its management team led by Larry and Pete. Paul and I believe it will be a great cultural fit for both our organisations and we’re excited to be part of Zip’s next chapter,” stated Charlie Youakim, Co-founder, Executive Chairman, and CEO of Sezzle.
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