Squire Patton Boggs Advises Sezzle on Merger With Zip

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Squire Patton Boggs has advised US-based instalment payment platform Sezzle Inc. (ASX:SZL) (Sezzle) in relation to its acquisition by Australian-based buy now, pay later provider Zip Co Limited (ASX: ZIP) (Zip) by way of an all-scrip merger under the laws of the Delaware. Sezzle stockholders will be entitled to receive 0.98 Zip ordinary shares for every Sezzle share or CDI held, valuing Sezzle at $491 million. Zip has also announced a capital raising to raise up to A$198.7 million to strengthen Zip’s balance sheet and position the combined entity for sustainable growth.

Sezzle provides a payments platform that facilitates fast, secure payments between shoppers and retailers, via a short-term, interest-free instalment payment plan that delivers to shoppers both a budgeting and financing value proposition. The combination of Zip and Sezzle will develop the product offering of both entities, with the combined entity having enhanced scale across 8.8 million customers and more than 60,000 merchants in the US.

This marks the third major transaction that the firm has worked on for Sezzle, including its A$217 million ASX listing and IPO on the ASX (which received an Excellence Award in the ECM Deal of the Year category at the 2020 Australasian Law Awards) and a subsequent A$86 million fundraising in 2020.

Simon Rear, a corporate partner in the firm’s Perth office, is leading the team advising Sezzle. He is supported by Michael Gajic, a corporate partner in our Sydney office, senior associate Michael Van Der Ende and associates Connor McClymont, Josh Walsh and Sophie Davey. Sezzle is also advised by Ropes & Gray as US legal counsel and Goldman Sachs as financial advisor. Skadden, Arps, Slate, Meagher & Flom LLP and Arnold Bloch Leibler are providing legal advice to Zip and BofA Securities and Jarden-Evercore are acting as financial advisers to Zip.

Mr Rear said: “The Buy Now, Pay Later space is at a critical juncture and it is clear that scale is a priority. This transaction will help bring that scale to Zip and Sezzle and positions them as a stronger player in the global market.”

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