Zip Co Limited (ASX: Z1P) (“Zip”), the buy now, pay later (BNPL) provider, has acquired Sezzle Inc. (ASX:SZL) (“Sezzle”), a US BNPL player with strength in small and medium businesses (SMB) supported by omni-channel solutions, in an all-scrip transaction by way of a statutory merger under the laws of the State of Delaware (the “Proposed Transaction”). 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 (including as represented by a CHESS depository interest (CDI) in Sezzle).
Zip is one company 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’s payments platform increases the purchasing power for millions of consumers by offering interest-free instalment plans at online stores and in-store locations. Sezzle also has a long-term instalment 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 US.
The proposed transaction, which has been unanimously approved by both companies’ boards of directors, and the mergers and acquisitions committee of the board of directors of Sezzle, capitalises on Zip and Sezzle’s shared mission to financially empower the next generation. It advances both companies’ strategic objectives to be a global and US leader in the BNPL industry and to drive a high growth ecosystem that brings merchants and customers together. The proposed transaction brings together talent and has the potential to generate substantial synergy benefits to accelerate both companies’ paths to profitability.
“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 US market,” said Larry Diamond, Co-Founder and Global CEO of Zip. “Pete and I have known Charlie and Paul (co-founders of Sezzle) for some time, and we’ve been impressed by what the Sezzle team has achieved. Their responsible lending, their Sezzle Up credit builder programme, as well as their B Corp certification is to be admired. We’re excited to welcome the entire Sezzle team on our journey, as we continue our mission towards being the first payment choice, everywhere and every day.”
“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. “I believe the transaction will position us to win in the US and globally.”
