Ahh, so the rumours really were true. Combined, the new business will have around 13 million customers.
Background: Zip is an Aussie buy now, pay later company that started back in 2013. And since 2020, it's been on a bit of an acquisition spree.
What happened: After months of spinning the rumour mill, Zip has finally confirmed it'll buy Sezzle. Combined, the new biz will have 13 million customers and 125,000 merchants. Sheesh!
What else: Zip will need to raise $200 million via a share placement and share purchase plan to fund the acquisition.
💡When a company wants to raise capital for an acquisition, it generally has two potential options. It can either borrow the money from a lender, or issue new shares in the company.
💡There are tonnes of ways to raise money on the sharemarket (i.e. IPO, rights issue, share purchase plan) and one of them is a placement.
💡Unlike an IPO, placements are only offered to a small number of private investors (i.e. investment banks, insurance companies). It generally comes without a prospectus, so it's cheaper - and quicker.
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