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PayPal to buy Sweden-based financial technology company iZettle for $2.2B

PayPal Holdings Inc. announced that it will acquire Swedish financial technology company iZettle AB for $2.2 billion, confirming earlier reports.

Upon closing of the transaction, PayPal expects to gain in-store capabilities in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden.

IZettle will operate as part of PayPal's merchant services offering. PayPal expects iZettle to become the European "center of excellence" for its in-store products and services.

The Swedish company will continue to run under its current management team, led by iZettle co-founder and CEO Jacob de Geer. The Swedish company anticipates gross revenues of approximately $165 million in 2018. It expects to reach EBITDA profitability by 2020 on a stand-alone basis.

The transaction is expected to be approximately 1 cent dilutive to PayPal's full-year 2018 non-GAAP EPS projection. The two companies will continue to operate independently until close.

The transaction is expected to close in the third quarter

Evercore is acting as sole financial adviser to PayPal, while Skadden Arps Slate Meagher & Flom LLP and Roschier are its legal advisers for the transaction. J.P. Morgan Securities PLC is the sole financial adviser to iZettle, while Gernandt & Danielsson is the legal adviser.