The Montreal provider of electronic payment solutions Nuvei is preparing to acquire a competitor located in Atlanta, Paya, for an estimated sum of 1.3 billion US dollars.
The acquisition of Paya will be made at a price of US$9.75 per share, the Montreal company announced in a press release Monday morning, which represents a premium of 25% on the closing price last Friday, and 30% on the average price of the last 90 days. It will be funded by a combination of a new US$600 million credit guarantee, existing credit guarantees and cash available to Nuvei.
“The proposed transaction will combine two payment platforms, focused on high growth, technology development and people-centric culture,” said Philip Fayer, CEO of Nuvei. It will accelerate our integrated payment strategy and diversify our business into key high-potential non-cyclical verticals. »
Disputed transaction
With Paya, Nuvei acquires a smaller company with a profile similar to its own. The 300 employees of the firm located in Atlanta, Georgia, in the United States, manage a payment platform mainly used by companies (35% of revenues), as well as in the fields of health, education and services. public bodies. The NASDAQ-listed company reported revenue of US$277 million in the third quarter of 2022, for a net profit of US9 million. In comparison, Nuvei, 1600 employees and whose customer profile is substantially the same, had revenues of 835 million US during the same quarter, for a net profit of 65 million US.
The transaction, which has received the approval of both boards of directors and is expected to close in the first quarter of 2023, is being denounced by a law firm specializing in the defense of shareholder rights, Ademi LLP. The Milwaukee-based firm believes Paya’s growth prospects are “excellent” and that the bid price of US$9.75 per share “unreasonably limits competing bids for Paya by imposing a significant penalty” if the company Atlanta accepts a higher offer. Paya will have to pay 38 million US in such a scenario, it is announced in the press release from Nuvei.
When it listed on the Toronto Stock Exchange in September 2020, Nuvei had exceeded all expectations, with its stock gaining 30% in value in one day and giving the company a valuation of 5.7 billion. From $46.15 on the first day, the stock steadily climbed until reaching a high of $171.78 on September 17, 2021. It has, however, been continuously declining since last spring and was trading at $37.40 at markets close on Monday.
In 2019, the Montreal company made a first major acquisition by paying 899 million US to get its hands on the British company SafeCharge.