Payment processing provider Nuvei to buy rival Paya for $1.3B
Payment processing provider Nuvei Corp. today announced that it has inked a deal to acquire rival Paya Holdings Inc. for $1.3 billion.
The all-cash transaction values Paya at $9.75 per share, a 25% premium to the last closing price of the company’s stock. Nuvei plans to finance the transaction with cash on hand, an existing credit facility and $600 million in new debt.
“The proposed acquisition of Paya is a powerful next step in the evolution of Nuvei, creating a preeminent payment technology provider with strong positions in global e-commerce, integrated payments and business-to-business,” said Chief Executive Officer Philip Fayer. “It will accelerate our integrated payment strategy, diversify our business into key high-growth noncyclical verticals with large addressable end markets and enhance the execution of our growth plan.”
Montreal-based Nuvei operates a cloud platform that online retailers and other companies use to process customer payments. Its platform enables shoppers to make purchases in more than 150 currencies. It supports more than 585 payment methods, including credit cards, digital wallet apps and so-called buy now, pay later platforms such as Klarna.
Nuvei offers its platform’s features through an application programming interface. Developers can integrate the API with e-commerce websites’ shopping carts, mobile apps and other services.
Atlanta-based Paya provides a competing payment processing platform that offers similar features. Like Nuvei, the company makes its platform’s capabilities available through an API that developers can integrate with their applications. Paya processes more than $40 billion worth of transactions annually for about 72,000 businesses worldwide.
The company generated a net income of $9.5 million on $277 million in revenue during the 12 months through September 30. Nuvei, in turn, generated a $65 million net income and revenues of $835 million.
Nuvei says the acquisition will grow its market share in a half dozen segments where the latter company has a more established presence. Those segments include the business-to-business goods and services, healthcare, nonprofit, education, government and utility sectors. Additionally, the company expects the deal will create new opportunities to upsell its software to Paya partners.
Another factor behind the acquisition is that Paya offers more than 300 third-party software integrations. They ease tasks such as syncing purchase logs from a retailer’s online store to its enterprise resource planning system. After the acquisition completes, Nuvei will use Paya’s integrations to expand its feature set.
Nuvei expects the acquisition to be accretive to its adjusted earnings per share in its 2023 fiscal year. In the longer term, the company estimates, the deal will facilitate annual cost savings of up to $21 million within 24 months.
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