PayPal Gives $ 2.2 Billion for a European Company

PayPal Gives $ 2.2 Billion for a European Company

PayPal Gives $ 2.2 Billion for a European Company

Until now, iZettle has mainly operated in Europe and Latin America but, with PayPal's backing, the possibility of a stronger entrance into the USA market becomes more plausible.

The deal will have forced PayPal's hand for years.

IZettle is best known for offering small businesses a mini credit card reader that can turn smartphones and tablets into payment registers, akin to that offered by US -based Square Inc the company founded by Twitter CEO Jack Dorsey, according to Reuters.

The acquisition will help PayPal to expand its in-store presence and strengthen its platform to better serve small businesses across the globe.

PayPal is acquiring iZettle, in what will be the largest acquisition in PayPal's history - they're swallowing up a massive competitor that competes in Europe and Latin America. Founded in 2010 by Jacob de Geer and Magnus Nilsson, iZettle also started out with a mobile-phone gadget for accepting credit card payments.

Given that iZettle is in 12 countries compared to PayPal's 200, the latter can certainly help it deal more quickly with the various regulatory issues needed to expand into new geographies. IZettle does not now face too much direct competition from its main rival, the NASDAQ-listed Square, as the companies' operations only really overlap in the UK. "Upon closing, we will gain in-store capabilities in 11 markets, near-term in-store expansion opportunities into other existing PayPal markets, and the acceleration of omnichannel commerce solutions in Australia, U.K., and the U.S".

It was announced ten days ago that Sweden's iZettle was planning to go public provoked cheers among European tech boosters, but that excitement proved to be short-lived.

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 San Francisco-based company continues to operate today as a standalone service within PayPal. 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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