Stripe, a privately held payment processing firm, and Advent International, a private equity firm, have reportedly offered to acquire PayPal Holdings NASDAQ:PYPL, a digital payments company founded in the late 1990s, at a valuation of more than $53 billion. Reuters reported that the proposed deal values PayPal at $60.50 per share, representing a roughly 28% premium to its Tuesday closing price. The offer is reportedly supported by approximately $50 billion in committed bank financing, which could make the proposal one of the most significant transactions in the payments sector.
Under the proposed structure, Stripe and Advent would jointly own PayPal through equal stakes and would keep the company intact rather than separating its businesses. Investors may view the offer as a potential exit opportunity after PayPal shares declined more than 40% from the beginning of last year, as the company struggled to modernize its payment technology while competitors gained market share. PayPal was also reportedly planning to reduce its workforce by about 20% over the next two to three years as part of new Chief Executive Officer Enrique Lores' effort to lower costs and turn around the business.
The potential acquisition could substantially expand Stripe's position in digital payments by combining its growing platform with PayPal's established operations. Stripe reached a valuation of $159 billion through an employee tender offer in February, up from $106.7 billion the previous year, while saying it remained profitable last year and continued investing heavily in product development and acquisitions. The company has also acquired Bridge, a stablecoin orchestration platform, and Privy, a crypto wallet provider, as it expands further into crypto-related payments, although Stripe declined to comment and representatives for Advent and PayPal had not immediately responded.