Deal: Baker McKenzie has assisted its client, Afterpay, in a successful $1.05 billion capital raising, propelling the fintech firm into the ASX top 20.

Value: The deal is split into a $650 million placement a, $150 million share purchase plan, and a $250 million sale of shares by the two Afterpay co-founders and executives, Nick Molnar and Anthony Eisen.

Area: Capital raise.

Key players: Guy Sanderson and Antony Rumboll, partners in Baker McKenzie’s Sydney office led the team. 

Deal significance: The company’s raise comes as it continues to witness growth during the COVID-19 pandemic.

A shift toward online spending, with customers developing an aversion to traditional credit products and an increased focus on budgeting has played in the favour of the BNPL company according to Afterpay.

The company says it will use the additional capital to continue to accelerate growth and comes on the back of the announcement that the company achieved $11.1 billion of underlying sales in FY20 – double what it achieved in FY19.

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Baker McKenzie’s multinational team of lawyers successfully completed the deal in a short period of time, transacting seamlessly despite the challenges posed by COVID-19. The work included US securities law input from their specialists in Singapore.

Mr Sanderson said the size, speed and demand for the deal underscore the success that buy now, pay later businesses are experiencing in response to global shifts in consumer behaviour.

“Afterpay is flourishing during what is otherwise a difficult time,” Mr Sanderson said. “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.”

The new capital will also play a part in the company’s expansion into Canada, due to launch in Q1 FY21.

“Today’s announcement is the outcome of a lot of hard work and unwavering commitment by a [world-class] team,” Mr Eisen said.

“The flexibility in our business model allowed us to manage risk when we needed to, but also take advantage of positive customer sentiment and behaviours. Our ongoing investment in growing our retailer and customer bases, and global expansion objectives, will ensure we continue to deliver [long-term] benefits to our shareholders.”

Baker McKenzie has acted for Afterpay since the company’s initial public offering in 2016, and has since assisted in multiple rounds of capital raising, as well as in the company’s expansion to other markets.

Mr Sanderson said Baker McKenzie was pleased to support an important client, and that the deal was “exceptionally well supported by existing and new shareholders.”