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Square, PayPal Shares Rise as Rival SumUp Buys Fivestars for $317M

PayPal and Square were higher after European rival SumUp acquired U.S. marketing startup Fivestars for $317 million.
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Shares of payments specialists PayPal  (PYPL) - Get PayPal Holdings Inc Report and Square  (SQ) - Get Square, Inc. Class A Report were higher on Thursday after European rival SumUp acquired U.S. marketing start-up Fivestars for $317 million. 

The deal gives SumUp access to San Francisco-based Fivestars' 12,000 businesses and $3 billion in yearly sales. 

SumUp already operates in the U.S., but this cash-and-stock deal is its first U.S. acquisition, Bloomberg reported. 

SumUp is best known for its mobile credit card readers that enable small businesses to accept electronic payments. The London company currently has more than 3 million merchants signed up across the U.S., Europe and Latin America. 

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"I would say where we focus and excel is truly on the smallest merchants,” Andrew Helms, U.S. managing director at SumUp, told CNBC. “We’re not looking to go into enterprise. We’re not going more upstream.”

Prior to the acquisition by SumUp, Fivestars had raised a total of $115 million from investors, CNBC reported. 

At last check shares of Square were 2.5% higher at $248.74 while PayPal shares gained 2.5% to $265.33.

Earlier this week, Square rose after Atlantic Equities upgraded the company to overweight from neutral with a $300 price target. 

Analyst Kunaal Malde said in a research note that the company's growth prospects "remain substantial" as it continues to disrupt consumer and business banking through "strong execution against a digital-first strategy," according to the Fly.