Zip Co propels higher on US takeover target update

Zip Co propels higher on US takeover target update

A proposed US acquisition that put a rocket under Zip Co (ASX: Z1P) shares in June is once again lifting investor sentiment for the buy-now-pay-later (BNPL) group, whose price rose 13.05 per cent today to $7.45.

With shareholders set to vote on the acquisition of QuadPay on 31 August, Zip Co announced encouraging indicators from its intended US partner. 

Quadpay's revenue grew 30 per cent to hit record levels of US$70 million in July and in August its client base surpassed two million, up from 1.5 million at the end of March.

The company has teamed up with several Internet Retail 100 merchants including Fanatics and Mercari (TYO:4385), representing combined online volume of over US$3 billion. These partnerships are set to go live in time for the Q4 holiday period in the US.

"The momentum we are starting to see is a testament to our product and technology capabilities which are being recognised as market leading," says Quadpay co-CEO Brad Lindenberg (pictured), who co-founded the company with Adam Ezra.

"QuadPay is the easiest platform for enterprise merchants to integrate with, both online and in-store.

"With less than 15 per cent of the Internet Retail 1000 offering an interest free BNPL service, we look forward to joining forces with Zip and rapidly accelerating our growth in market."

The deal proposes to give Quadpay shareholders a 23.3 per cent stake in Zip Co, or around 119 million shares in the Australian company.

In the lead-up to the deal's announcement this offer gave Quadpay an enterprise value of around $403 million, but the buying frenzy that has ensued now makes it worth more than $886 million.

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