PayPal Holdings, Inc. has revealed its plans to acquire Paidy, a Japanese two-sided payments platform and a buy now, pay later solutions provider. The deal was announced for ¥300 billion or US$2.7 billion cash transaction.
In the official announcement PayPal noted that the acquisition will expand its capabilities, distribution and relevance in the domestic payments market in Japan. The third largest ecommerce market in the world will complement PayPal’s existing cross-border ecommerce business in the country.
Peter Kenevan, vice president, head of Japan at PayPal, commented:
Paidy pioneered buy now, pay later solutions tailored to the Japanese market and quickly grew to become the leading service, developing a sizable two-sided platform of consumers and merchants. Combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market.
With Paidy’s payment services, Japanese clients can make purchases online and pay for them each month in a consolidated bill at a convenience store or via bank transfer. The company’s technology can score creditworthiness, underwrite transactions and guarantee payment to merchants. Consumers are guaranteed comfort and safety while shopping online. The company drives increased conversion rates, average order values and repeat purchases for merchants.
Paidy’s products like its Paidy 3-Pay monthly installment offering, has driven strong engagement with over six million registered users and played a key role in establishing strategic relationships with leading global brands and online marketplaces. Paidy’s integrations with PayPal and other digital and QR wallets through Paidy Link expands Paidy’s reach to online and offline merchants beyond its platform.
Russell Cummer, founder and executive chairman of Paidy, said:
There is no better home for Paidy to continue to grow and innovate than PayPal, which has been removing friction from online shopping for more than 20 years. Japan has been a vibrant environment for our growth to date and we’re honored to have our team’s hard work and potential recognized by a global leader. Together with PayPal, we will be able to further achieve our mission of taking the hassle out of shopping.
Riku Sugie, president and CEO of Paidy, added:
Paidy is just at the beginning of our journey and joining PayPal will accelerate our plans to expand beyond ecommerce and build unique services as the new shopping standard. PayPal was a founding partner for Paidy Link and we look forward to working together to create even more value. Thank you to our community of merchants and users who helped us get to this important milestone.
The acquisition deal is expected to close in the fourth quarter of 2021 and expected to be minimally dilutive to non-GAAP earnings per share in 2022.
Once the transaction is complete, Paidy will continue to operate its existing business and maintain its brand.The Paidy team will continue to be led by Cummer and Sugie.
The announcement also noted that BofA Securities is acting as sole financial adviser to PayPal, while White & Case will be lead legal adviser with regard to the transaction. Goldman Sachs will be the sole financial adviser to Paidy and Cooley LLP and Mori Hamada & Matsumoto are acting as its legal advisers.
