PayPal has reached an agreement to acquire Stockholm-based iZettle in an all-cash deal valued at $2.2 billion, it's biggest ever transaction in a dynamic and fluctuating payments environment.
The timing of the agreement comes just weeks after iZettle announced plans to float on Nasdaq Stockholm in a bid to raise $227 million at a valuation of $1.1 billion.
Jacob de Geer, CEO and co-founder at iZettle explains the change in direction: "Late in the IPO process, PayPal got in touch and showed a serious interest in iZettle. The relationship with PayPal is not a new one, in fact we’ve talked about different ways of working together for years. But this time it very quickly turned into a detailed discussion on how we could benefit from joining forces. And we both realised the great opportunity in doing just that."
The combination brings together iZettle’s in-store experience, digital marketing strength and mobile point-of-sale technology with PayPal’s global scale, brand reputation and online and mobile payments expertise.
For PayPal, the deal delivers a ready-made competitor to Square with a franchise across 12 markets in Europe and Latin America and a small merchant base of a half-a-million clients.
"Small businesses are the engine of the global economy and they are increasingly demanding a partner that can provide a one-stop solution to help them compete and win online, in-store and via mobile," says Dan Schulman, president and CEO of PayPal. "This is the largest acquisition in our company’s history and significantly expands our in-store presence around the world, strengthening our platform to help millions of small businesses around the world grow and thrive in an omnichannel retail environment."
The deal is expected to close in the third quarter. Jacob de Geer will continue to lead iZettle from its Stockholm base, reporting to PayPal COO Bill Ready.