PayPal to buy Square competitor iZettle for $2.2B

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Payment giant Paypal has announced that it is all set to acquire Stockholm-based Fintech startup iZettle for $2.2 billion.

IZettle sells card readers that connect to smartphones or tablets, helping small companies to avoid some of the prohibitive costs associated with taking card payments. The chip-card reader and its app for smartphone-based mobile commerce meet worldwide security standards. iZettle's service is available in 12 countries which includes United Kingdom, Finland, Denmark, Germany, Italy, Netherlands, Spain, Italy, Germany, and Brazil, among others.

USA -based PayPal already operates in more than 200 countries around the world but is working to expand its offerings.

IZettle has almost half a million merchants on its platform and expects to generate gross revenues of $165m (£122m) in 2018, processing total payments of around $6bn (£4.4bn). It would be the largest ever deal for PayPal, Bloomberg reported. "Combined with the iZettle brand, capabilities and talent this means we're ready to level the playing field for small businesses all around the world".

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"Small businesses increasingly want a full suite of capabilities across channels, a one-stop stop", Dan Schulman, chief executive officer of PayPal (pypl), said in an interview.

The current CEO of iZettle, a company based on Stockholm, will report to the PayPal CEO and both companies want to improve the technological aspects of offline payments in many parts of Europe. The company has grown its revenues at a CAGR of approximately 60% from 2015 to 2017. iZettle expects to reach EBITDA profitability by 2020 on a standalone basis. Upon closing, iZettle will become the European center of excellence for PayPal's in-store product and services offerings.

Evercore is acting as sole financial adviser to PayPal, and Skadden, Arps, Slate, Meagher & Flom LLP and Roschier are acting as its legal advisers with regard to the transaction.

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