Zip accelerates global expansion with the acquisition of US-BNPL player, QuadPay and raises up to $200m to drive growth
ASX-listed Zip Co Limited announce today that it has entered into an agreement to acquire the remaining shares in the New York based “Buy Now, Pay Later” provider QuadPay Inc. for scrip consideration.
QuadPay stockholders will be entitled to receive up to a maximum of approximately 119m fully paid ordinary shares of Zip, equivalent to 23.3% of the issued share capital of Zip at completion. The QuadPay Acquisition implies an enterprise value of approximately US$269m or A$403m for QuadPay and is accretive for Zip on both a total transactions volume (TTV) and revenue basis.
The QuadPay Acquisition builds on Zip’s global strategy and the Zip Board believes this is a compelling investment proposition for shareholders:
▪ Access to the world’s largest retail market – QuadPay is one of the leading BNPL platforms in the US, the world’s largest retail market (US$5+ trillion and >15x size of Australia) during a time when interest-free instalments are transforming the way people pay.
▪ Leading global BNPL player – Post-completion, the combined group will have operations across the world in 5 countries (AU, NZ, US, UK and SA) with combined annualised TTV of $3.0b, annualised revenue of $250m, 3.5m customers and 26.2k merchants.
▪ Increases scale, growth potential and provides strong unit economics – QuadPay’s model has demonstrated significant growth since its founding in 2017:
- at the end of March, QuadPay had more than 1.5m customers and 3.5k merchants, including brands such as Fashion Nova and Deckers (UGG); and
- annualised revenues of $70m in Q1 CY20 and annualised TTV of $900m in Q1 CY20
- industry-leading Net Transaction Margins (NTM) >2%5
▪ Category innovator with leading payments app – QuadPay was amongst the first BNPLs to leverage virtual card technology in partnership with Stripe, demonstrating a strong culture of innovation. QuadPay’s proprietary QuadPay Anywhere technology:
- facilitates instalments anywhere within the Visa acceptance network online and offline, and enables in-store rollout with no POS integration; and
- is ranked in the top 100 US shopping apps with an App Store rating of 4.8
▪ Founder led business with strong alignment – QuadPay’s team is New York headquartered and led by co-founders and joint CEOs Adam Ezra and Brad Lindenberg, who will join the Zip global leadership team, with ultimate responsibility for scaling the US business. Retention and performance equity has been offered, linked to aggressive growth targets.
