Tiger Management and Woodson Capital to take $100m stake in Afterpay as part of $400m raising

Afterpay co-founder and CEO Nick Molnar. David Geraghty/The Australian

Afterpay has announced the terms of its equity raising, with the company to secure $300 million through a fully underwritten primary placement to institutional investors.

It comes in conjunction with a secondary share selldown by its founders and executives to secure an additional $100m.

The raise through the sale of 13.79 million new securities in Afterpay is being handled by Citi.

The funds will be used to provide Afterpay (APT) with capital flexibility to support its midterm target of more than $20 billion of gross merchandise value and the acceleration of gross merchandise value growth in the United States and other international opportunities, including its launch in the United Kingdom.

Funds will also be used for investment in enterprise and scaling small to medium business capability.

Anthony Eisen and Nick Molnar.

In conjunction with the payment, founders Nicholas Molnar, Anthony Eisen have both agreed to sell 2.05 million shares separately while and executive director David Hancock will sell 400,000 as part of a secondary offering to raise $100m.

Shares in Afterpay last closed at $24.17 with its market value now at $5.77 billion.

The shares in the raise are being offered at range of between $21.75 to $23 and will be sold in a book build, which is a discount range of 4.8 per cent to 10 per cent from the June 7 closing price of $24.17.

The shares in the secondary offering are being sold to US-based investors Tiger Management and Woodson Capital, subscribing for up to 4.5 million shortfall securities under the placement at the $21.75 per share floor price.

A share purchase plan will also be launched to raise up to $30m.

Highbury Partnership, which is understood to have locked in the US-based cornerstone investors for Afterpay, is working on the transaction as sole financial adviser while law firm Baker McKenzie is also involved as legal adviser.

Afterpay was founded in 2015 by Nicholas Molnar, who is also chief executive, and Anthony Eisen as a financial technology company that enables consumers to pay for goods after they have been purchased. It operates in Australia, New Zealand and the United Kingdom.