In an early August press release, digital payments powerhouse Square announced their intention to acquire buy now, pay later pioneer Afterpay. The Scheme Implementation Deed stipulates that Square will acquire all issued shares in Afterpay via a Scheme of Arrangement, with the all-stock deal valued at $29 billion based on the closing price of Square common stock on July 30th, 2021.
The stated goal of the acquisition is to position both companies to offer better financial products and services. Traditional financial products are increasingly failing to meet the needs of a diverse customer base looking for more flexible and convenient ways to manage their finances.
Square intends to integrate Afterpay into its existing ecosystems based on Seller and Cash App, enabling even small merchants to offer buy now, pay later services to their customers at checkout. Consumers utilizing Afterpay will be able to manage their installment payments directly in Cash App, giving users the opportunity to discover additional merchants and buy now, pay later offers.
This deal will provide a wider range of financial services to both customers and merchants, as well as enabling merchants to grow their businesses by driving repeat purchases, raising average transaction values, and offering buyers the ability to pay over time. With the transaction expected to close in Q1 2022, the CEOs of both companies have expressed their excitement at the prospect of growth acceleration and expanding market accessibility.