Baker McKenzie has assisted its client, Afterpay, in acquiring a European buy now, pay later company, Pagantis, in a strategic move that will enable Afterpay to dramatically expand its reach into the largely untapped European Union market.
The acquisition will be accomplished through an agreement in which Afterpay's subsidiary, Clearpay, will acquire all shares of Pagantis, giving access to the existing EU regulatory licences held by Pagantis for a springboard into European markets.
The potential market for buy now, pay later services in Europe is thought to be in excess of €300b, or AU494b. Pagantis has existing operations in the key markets of Spain, France and Italy, with regulatory approval to operate in Portugal and a pending approval to launch in Germany.
The deal has a value of at least €50 million, or AUD82.4 million, and is expected to complete by December 2020, subject to regulatory approval.
"Baker McKenzie has a longstanding relationship with Afterpay," said Guy Sanderson, relationship partner on the deal, noting that the firm has acted for the company since its initial public offering in 2016 and in multiple rounds of capital raising (including $1.05 billion raised in July 2020), as well as in the company's expansion to other markets.
"This deal required advice and execution in multiple jurisdictions, managing a variety of regulatory and legal environments," Mr. Sanderson said. "For deals of this ambition and reach, clients look to a firm like Baker McKenzie that can provide cohesive and seamless advice, working as a global team."
The European transaction team was led by James Thompson, Partner and Ben Saraci, Associate in London office, with extensive involvement of Carlos Martin, Team Leader Corporate and Modesto Puerta, Associate in Madrid. On the Regulatory side, the team was led by Jaime Denis, Team Leader, Banking & Finance in Madrid and Caitlin McErlane, Partner in London. Tax advice was provided by Alistair Craig, Partner and Daniella Mandela, Associate in London. Advice on the financing documents was provided by Rosanna D'Onza, Partner, Marina Martinez, Associate and Carmen Gonzalez-Noain, Associate in Madrid.
"It has been an absolute privilege to have had the chance to be involved with the Afterpay team on this key step as they embark on their expansion in Europe," James Thompson said.