The firm also assisted on a massive capital raising that put the company into the ASX top 20 in July
Baker McKenzie has guided Australian buy-now-pay-later (BNPL) company Afterpay in its expansion into Europe.
The firm advised its long-term client as Afterpay acquired European BNPL company Pagantis, which operates in Spain, France and Italy. Pagantis also has regulatory approval to operate in Portugal, and is awaiting approval to debut in Germany.
The deal involves an agreement through which Afterpay subsidiary Clearpay will snap up 100% of Pagantis’s shares, “giving access to the existing EU regulatory licences held by Pagantis for a springboard into European markets,” Baker McKenzie said, and providing Afterpay with “first-mover advantage.”
The transaction has a minimum value of €50m or $82.4m. With this opening, Afterpay taps into a BNPL market whose potential value is estimated to exceed €300bn or $494bn.
“This deal required advice and execution in multiple jurisdictions, managing a variety of regulatory and legal environments,” said Sydney-based partner Guy Sanderson, who was Baker McKenzie’s relationship partner on the transaction.
London-based partner James Thompson took point on the European transaction team alongside associate Ben Saraci. Carlos Martin, corporate team leader in the firm’s Madrid office, and associate Modesto Puerta contributed significantly as well. Meanwhile, Jaime Denis, who leads the banking and finance team in Madrid, led the team on working on the regulatory aspects of the deal alongside London-based partner Caitlin McErlane.
London partner Alistair Craig and associate Daniella Mandela advised on the tax aspects, while Madrid partner Rosanna D'Onza and associates Marina Martinez and Carmen Gonzalez-Noain assisted on the financing documents.
The deal is expected to be completed in December pending regulatory approval.
“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,” Thompson said.
In July, Baker McKenzie also advised Afterpay on a massive $1.05bn capital raise that saw the company secure a place in the ASX top 20. The raising involved a $650m placement and a $150m share purchase plan; Afterpay co-founders Nick Molnar and Anthony Eisen also sold $250m of shares.
Sanderson led Baker McKenzie’s multinational team on this transaction alongside partner Antony Rumboll, with the firm’s Singapore specialists offering advice on US securities law. Sanderson said that the size, speed and demand for the deal highlighted the success of BNPL businesses in response to global shifts in consumer behaviour.
“Afterpay is flourishing during what is otherwise a difficult time. They are in a red-hot sector of the market representing a shift towards online and digital, and they are the forefront of that shift in consumer behaviour around the world,” he said.
The deal was “exceptionally well supported by existing and new shareholders,” Sanderson said, and the firm’s team was able to complete the transaction quickly despite COVID-19.
