Openpay Group Ltd (ASX: OPY) is a fast-growing player in the global ‘Buy now pay later’ (BNPL) payment solutions market that operates across Australia, New Zealand, the UK and recently, even the USA. The Company’s platform enables it to deliver flexible plans in the market with durations of 2–24 months and values of up to $20,000.
Openpay focuses on industries such as Automotive, Healthcare, Home Improvement, Memberships and Education; and its target customers are finance-savvy and of an older demographic who useOpenpay plans as a cash flow management tool. Openpay also has a unique B2B offering, OpyPro (formerly Openpay for Business), a SaaS-based platform that allows companies to manage trade accounts end-to-end, including applications, credit checks, approvals and accountmanagement in the one system.
This morning, Openpay announced their plans to acquire 100% of Payment Assist, a leading BNPL provider in the UK Automotive sector. The deal accelerates growth and the path to profitability for Openpay Group and makes the UK the most dominant geographic market for Openpay on a pro-forma basis, expected to generate more than half of Openpay Group’s TTV and nearly half of its revenue in CY21.
Payment Assist is to be acquired for £11.5 million upfront, plus an earn-out component of up to £17 million, with completion expected in 1H FY2022.
Payment Assist serves around 500,000 customers in the UK with easy payment plans for automotive servicing and repair. It is currently available at more than 7,000 locations across the UK and has 177,000 Active Customers. In CY 2020, Payment Assist achieved a Total Transaction Value of £78.1m, up 26% on FY 2019 and is targeting TTV of £105.3m in CY 2021. With a total addressable market of £26.7 billion per annum across 42,000 UK garages, the acquisition provides Openpay with significant expansion and scale opportunity in the automotive vertical and beyond.
The acquisition certainly accelerates Openpay’s entry into the UK automotive vertical and the market reaction has been extremely positive today. At the time of this piece, OPY shares have gained 18.79% and currently trade at $1.675 a share, demanding a market capitalization of $187.66 million.
Get stock tips with our Market Experts. We help self-directed investors and self-managed super funds (SMSF) make smarter investment decisions and get better returns. Fill in your details and download your free Report instantly for the Top 3 Dividend Stocks to buy in 2021! Click here now!