Buy-now, pay-later platform Sezzle will be sold in a $352 million deal.

Australian company Zip Co., a rival, is buying Minneapolis-based Sezzle, which is publicly traded on the Australian stock exchange. Under the deal, Zip Co. shareholders would own 78% of the company and Sezzle owners would own the remaining shares.

Zip would also retain "a significant footprint" in Minneapolis.

Sezzle — founded in 2017 by Charlie Youakim and Paul Paradis — has more than 40,000 retail clients including Target. The company experienced a surge of new customers during the pandemic, with 3 million active users in the 12-month period ending in September. At the end of 2019, it had 914,886 users.

"Paul and I believe it will be a great cultural fit for both our organizations, and we're excited to be part of Zip's next chapter," Youakim, the company's chief executive, said in a statement. "I believe the transaction will position us to win in the U.S. and globally."

Sezzle has about 400 employees. Through the first nine months of 2021, Sezzle generated $81.9 million in total income, compared with $36.7 million in the same period a year ago.

The deal is expected to close in the third quarter of this year.

When it does, Youakim will become president and CEO of Zip's operations in the U.S., Mexico and Canada, and executive director and president of Sezzle. Paradis, currently president, also will join the U.S. leadership team.

Zip also is a publicly traded company on the Australian stock exchange.

Sezzle went public on the Australian exchange in 2019, and it had filed a preliminary registration statement with the Securities and Exchange Commission to go public in the U.S. as well.

Zip and Sezzle combined are expected to produce more than 60,000 merchant clients and 8.8 million customers using the platform, a joint statement from the companies said. Over a 12-month period ending this past September, $1.6 billion in merchant sales were made through Sezzle's platform.

Sezzle made several business deals last year that advanced the company's expansion, including a $30 million investment from credit card and payment services company Discover.

The company also entered a three-year agreement with Target, setting up the Minneapolis-based retailer to use its buy-now, pay-later platform. Sezzle developed its platform with the help of Target in 2019 through the retailer's Techstars retail accelerator in Minneapolis.