PYPL PayPal Holdings Inc

By Nina Trentmann 

PayPal Holdings Inc. will continue to pursue potential takeover targets in 2020 amid robust deal activity in the payments sector.

"There's a lot of opportunities to acquire companies inorganically," Chief Financial Officer John Rainey said in an interview.

PayPal on Thursday completed the acquisition of a 70% stake in Chinese payment platform Guofubao Information Technology Co., also known as GoPay. In November, PayPal struck a deal to buy Los Angeles-based shopping and rewards platform Honey Science Corp. for about $4 billion.

PayPal over the past two years has pursued an acquisition strategy that involved annual transactions in the range of $1 billion to $3 billion and has spent more than $7 billion on targets since then, Mr. Rainey said. He said the company would continue to look within that existing range.

PayPal needs to make sure it continues to find the right targets, said Moshe Katri, an equity research analyst for financial services firm Wedbush Securities Inc. "There's a long list of privately held companies in this space," he said. "The challenge is to find the right fit."

Valuations in the payments sector have gone up in the past two years, according to analysts.

Deals in the sector of late include Fidelity National Information Services Inc., which this year paid about $35 billion for Worldpay Inc., a payment technology firm, and Global Payments, which spent $21.5 billion for its peer Total System Services Inc.

PayPal in 2018 paid about $2.2 billion for Swedish financial-technology startup iZettle AB.

Despite its sizable budget for acquisitions, PayPal needs to be selective when looking for targets, Mr. Katri said.

"We are very mindful of that," Mr. Rainey said. "For every transaction that we do, there are dozens that we turn away."

Write to Nina Trentmann at Nina.Trentmann@wsj.com

(END) Dow Jones Newswires

December 23, 2019 05:44 ET (10:44 GMT)

PayPal (NASDAQ:PYPL)
Historical Stock Chart
From Mar 2024 to Apr 2024

PayPal (NASDAQ:PYPL)
Historical Stock Chart
From Apr 2023 to Apr 2024