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PayPal stumps up US$2.2bn for iZettle

The US company has reportedly considered buying iZettle for years and its hand might have been forced by the Swedish firm announcing plans to list its shares in Stockholm
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Will that be cash, sir?

Online payments pioneer PayPal Holdings Inc (NASDAQ:PYPL) is to buy Stockholm-based point-of-sale payments provider iZettle for US$2.2bn.

The all-cash deal will save iZettle from going through all the bother of a stock market listing; the Swedish company had flagged its intention earlier this month to float on the Stockholm Nasdaq exchange.

READ: PayPal Holdings reports strong first-quarter earnings helped by Venmo​​

"This combination brings together iZettle's in-store expertise, recognised brand and digital marketing strength with PayPal's global scale, mobile and online payments leadership, and trusted brand reputation,” said Dan Schulman, PayPal’s president.

PayPal is typically strong in the online arena, particularly on eBay (which used to own the company), and the deal with iZettle will strengthen its presence in bricks-and-mortar establishments, particularly in Europe.

iZettle, which provides mobile card readers and offers digital payment services to small businesses, is used by almost half a million merchants.

“Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile,” Schulman said.

Jacob de Geer, the chief executive officer of iZettle, will stay on-board to lead the business, reporting to Bill Ready, the chief operating officer of PayPal.

“Combining our assets and expertise with a global industry leader like PayPal allows us to deliver even more value to small businesses to help them succeed in a world of giants,” de Geer said.

The acquisition is the largest in PayPal’s history and is for a company that is still making a loss. In its documentation filed ahead of its proposed stock market listing, iZettle made an underlying loss (Lbitda) of 73mln krona, or roughly £6.18mln or US$8.36mln, in the first three months of 2018.

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