KKR & Co. agreed to purchase as much as €40 billion ($44 billion) of buy-now-pay-later loan receivables from PayPal Holdings Inc. in a deal that frees up the payments giant to do more share repurchases.
The agreement is part of a €3 billion loan commitment that allows private credit funds and accounts managed by KKR to purchase loans originated by PayPal in France, Germany, Italy, Spain, and the UK, according to a statement. PayPal expects the transaction to generate $1.8 billion in proceeds, allowing it to repurchase an additional $1 billion of shares this year.
“Our collaboration with KKR will allow us to accelerate our PayPal Pay Later originations alongside market demand in Europe while preserving free cash flow for other strategic initiatives,” Gabrielle Rabinovitch, senior vice president and acting chief financial officer of PayPal, said in the statement. “This transaction is yet another example of our disciplined approach to capital allocation.”
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