Australia's Afterpay buys Spain's Pagantis to expand into Europe

Australia’s Afterpay Ltd on Monday said it would acquire Spain-based peer Pagantis to expand its operations into Europe, as it rides a boom in online shopping sparked by the COVID-19 pandemic.

Australia’s biggest buy-now-pay-later (BNPL) company said its unit had entered an agreement to buy Pagantis from NBQ Corporate SLU for a minimum consideration of 50 million euros ($58.99 million).

Acceleration of online transactions during the pandemic has bolstered the popularity of alternative credit firms like Afterpay, as a growing number of young consumers who may not have access to credit cards and loans sign up on its platform to shop.

The announcement sent the company’s share price up 5.1% to an all-time high of A$83.0 in early trade.

“Our momentum to date has given us the confidence to expedite our expansion into new global regions,” Chief Executive Anthony Eisen said in a statement.

“Acquiring Pagantis provides us with the necessary regulatory licencing, resourcing and infrastructure to expedite the launch of Afterpay into key countries in Southern Europe and beyond,” he said.

The company said it was working with Pagantis and engaging with retailers, aiming to launch in the third quarter of 2021.

Melbourne-based Afterpay became one of the country’s 20 most valuable companies last week, after it doubled its annual core earnings forecast.

According to a regulatory filing last week, Japan’s largest lender by assets Mitsubishi UFJ Financial Group Inc had acquired about 5% of Afterpay, months after Chinese gaming and social media giant Tencent Holdings Ltd bought a 5% stake.

Afterpay is set to report its full-year results on Aug. 27.