PayPal acquires Swedish payments startup iZettle

PayPal buys Swedish start-up iZettle for $2.2bn in its biggest ever deal

Digital payments giant PayPal is to swallow up Swedish financial technology start-up iZetttle for $2.2bn (£1.6bn).

iZettle, best known for offering small payment machines to small merchants, ranks among the rivals of Square, founded by Twitter CEO Jack Dorsey. The small businesses are active across 11 countries, mostly in Europe, as well as Mexico and Brazil.

In a statement on its website, iZettle CEO and co-founder Jacob de Geer welcomed the deal, which he said would allow the company to "join forces" with PayPal.

De Geer will continue to lead iZettle, reporting to PayPal's COO Bill Ready, and will be joined by the rest of the iZettle management team.

The deal is the largest acquisition in PayPal's history. "Together, we will help small businesses around the world grow and thrive in the global digital economy".

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. "With almost half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal's market opportunity to be a global one-stop solution for omnichannel commerce". The opportunity to become part of PayPal was too good to pass up. The company said it expects to reach profitability by the year 2020.

The deal, which is due to close in the third quarter, is expected to be around $0.01 dilutive to PayPal's previously communicated full year 2018 non-GAAP earnings per share. The completion of this transaction is subject to customary closing conditions, including regulatory approvals. "But this is a very exciting way for the company to continue its vision". J.P. Morgan Securities plc is acting as sole financial adviser to iZettle, while Gernandt & Danielsson is acting as its legal adviser.

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