Australia's Afterpay Touch Group Ltd. is expanding into the U.K. by acquiring U.K.-based ClearPay Finance Ltd. and raising A$117 million to help fund its international expansion.
The payments company on Aug. 23 entered into a share purchase agreement with ThinkSmart Ltd. to acquire a 90% stake in ClearPay Finance for a total consideration of 1 million Afterpay shares. The deal is expected to be completed the same day.
The acquisition includes ClearPay Finance's corporate entity, contracts with service providers and key employees with knowledge of the U.K. market and regulatory landscape. It excludes ClearPay's intellectual property.
Afterpay may acquire the remaining shares held by ThinkSmart in the next five years from the completion of the deal.
The deal will allow Afterpay to launch its U.K. online platform in the next six months through ClearPay Finance, which will be rebranded to reflect its new parent's operations.
ThinkSmart will compensate Afterpay for all losses arising from ClearPay's legacy business.
Following the acquisition, Afterpay raised A$117 million via an institutional placement. The placement was priced at A$17.05 per share, the top end of the placement price range. The floor price was A$15.75 per share.
The price represents a 2.5% discount to the five-day volume weighted average price to close of trade Aug. 22.
The company also plans to raise A$20 million through a share purchase plan for eligible shareholders. Each shareholder will be able to subscribe up to A$15,000 worth of Aftepay shares through the plan.
Highbury Partnership Pty. Ltd. is the financial adviser to Afterpay on the acquisition, the placement and the share purchase plan. Citigroup Global Markets Australia Pty. Ltd. is the sole underwriter and bookrunner to the placement, while Bell Potter and Wilsons are co-managers.