- Buy now, pay later platform Openpay (OPY) has outlined a $67.5 million funding package just days after signing a major deal with Fidelity's Worldpay
- Up to $37.5 million will come from a placement to institutional investors while another $5 million will come from a share purchase plan
- The remaining $25 million will be derived from an 18-month corporate debt facility with Riviera Capital
- The proceeds will support Openpay's "six-pillar U.S. entry strategy," which includes integrating its technology platform with Worldpay's payment processing system
- A portion of the proceeds will also be used to bolster Openpay's U.K.-focused expansion plans, which includes a tech integration with ezyVet
- Openpay is down 5.39 per cent to $2.28 per share
Buy now, pay later platform Openpay (OPY) has outlined a $67.5 million funding package just days after signing a major deal with Fidelity's Worldpay.
According to this morning's announcement, $37.5 million will come from a placement to institutional investors, who have agreed to purchase roughly 18.5 million new fully paid ordinary shares at $2.03 each.
Based on Openpay's last closing price of $2.41 on March 26 and its 10-day volume weighted average price of $2.57, the issue price represents a discount of 15.8 per cent and 21.2 per cent, respectively.
Around 15.9 million of these shares will be issued under an initial tranche, which is expected to settle on April 8. The remaining 2.6 million shares will be issued under a second tranche to offshore investors and certain Directors, including Chairman Patrick Tuttle, Yaniv Meydan, and CEO and Managing Director Michael Eidel, subject to shareholder approval.
Another $5 million will come from a share purchase plan to eligible shareholders, who will be able to purchase up to $30,000 worth of Openpay shares — without incurring any brokerage or transaction costs — also at a price of $2.03 each.
The remaining $25 million will be derived from an 18-month corporate debt facility with Riviera Capital — an entity associated with existing shareholder and Sydney-based financial consultant Alteris Financial Group.
It adds to exisiting facilities in Australia worth $75 million — of which $40 million remains undrawn — and one in the U.K. worth £60 million (roughly A$108.37 million) — of which £50 million (roughly A$90.3 million) remains undrawn.
The proceeds will be used to support Openpay's "six-pillar U.S. entry strategy," which includes integrating the company's technology platform with Worldpay's payment processing system.
It's part of a deal that was unveiled earlier this week, under which merchants using Worldpay — which was by Fidelity National Information Services (FIS) in July 2019 for US$43 billion (roughly A$56.31 billion) — will be able to use Openpay's buy now, pay later (BNPL) options, while Worldpay will act as Openpay's "merchant acquirer" in the United States.
Openpay is now in the process of closing late-stage discussion with "large-scale aggregators" — initially in the healthcare sector — in preparation for a U.S. launch.
"Through this relationship, we will endeavour to offer Openpay's 'buy now, pay smarter' payment products to FIS merchants, initially focused on targeted verticals in the U.S. and using FIS as a merchant acquirer, based on the integration into their payment gateway," said Michael Eidel, Managing Director and CEO of Openpay.
A portion of the proceeds will also be used to bolster Openpay's U.K.-focused expansion plans, which include supporting retail growth and executing a technology integration with ezyVet's cloud-based veterinary practice software.
This push is part of an effort to break into the U.K.'s healthcare market before entering the broader automotive and home improvement sectors.
"The window of opportunity for our differentiated 'buy now, pay smarter' approach is open right now," Eidel continued.
"We are moving with urgency through this inflection point, and expect deployment of this funding to lead to a step-change in business performance."
Openpay is down 5.39 per cent to $2.28 per share at 11:53am AEDT.