Paya Acquisition: Key Details, Impact, and What Comes Next

Nuvei's acquisition of Paya for $1.3 billion marks a significant development in the payment technology industry. This strategic move enhances Nuvei's capabilities in integrated payments and B2B sectors, diversifying its business into high-growth verticals. The acquisition underscores Nuvei's commitment to expanding its market presence and delivering comprehensive payment solutions to a broader range of industries.

What Is Paya?

Founded over 20 years ago, Paya specializes in integrated payment solutions, offering services such as payment acceptance, disbursement, ACH, and software integrations with platforms like Sage and QuickBooks Online. Paya differentiates itself through continuous connectivity, ensuring secure and reliable transactions, a partner-centric approach that builds trust, agile technology that adapts to market changes, and a commitment to exceptional customer experiences and support.

Who Acquired Paya?

Nuvei is a fintech company specializing in modular, flexible, and scalable payment solutions designed to accelerate business growth. Their key offerings include payment acceptance, payout options, card issuing, banking, and risk management services. Nuvei's platform supports over 700 payment methods and 150 currencies, serving clients in more than 200 global markets. Recognized for their innovative technology and comprehensive support, Nuvei is a preferred partner for leading global brands, solidifying their influence in the fintech industry.

When Was Paya Acquired?

Nuvei announced its acquisition of Paya on January 9, 2023, and completed the transaction on February 22, 2023. This acquisition occurred during a period of significant growth in integrated payments and B2B solutions, aligning with industry trends of consolidation and expansion into high-growth verticals. The timing also reflects a broader trend of strategic acquisitions in the fintech sector, aimed at diversifying offerings and strengthening market positions.

Why Was Paya Acquired?

• Market Expansion: The acquisition of Paya allows Nuvei to diversify its business into high-growth, non-cyclical verticals such as healthcare, non-profit, government, utilities, and B2B markets. This strategic move leverages Paya’s deep enterprise resource planning (ERP) integrations and end-to-end commerce solutions, enabling Nuvei to offer its solutions to Paya’s partners and customers in the U.S. and beyond.
• Technology Integration: Paya’s software integrations with over 300 independent software vendor (ISV) platforms and end-to-end commerce solutions will be integrated into Nuvei’s global technology platform. This integration enhances Nuvei’s ability to capitalize on domestic and global software-led market opportunities, simplifying technical stacks for clients and managing regulatory frameworks more efficiently.
• Competitive Advantage: The acquisition strengthens Nuvei’s position as a preeminent payment technology provider with strong positions in global eCommerce, integrated payments, and B2B sectors. The combined entity is expected to deliver up to $21 million of estimated run-rate cost synergies within 24 months, providing significant revenue synergy upside potential and reinforcing Nuvei’s competitive edge in the market.

Acquisition Terms

• Acquisition Price: $1.3 billion
• Payment Method: All-cash transaction
• Key Conditions or Agreements:
  • The transaction has been unanimously approved by each party’s Board of Directors.
  • Nuvei will commence a tender offer to acquire all outstanding shares of Paya.
  • The closing of the tender offer is subject to certain conditions, including:
    • The tender of shares representing at least a majority of Paya’s outstanding shares.
    • The expiration or termination of the antitrust waiting period.
    • Other customary conditions.
  • Following the successful completion of the tender offer, Nuvei will acquire all remaining shares not tendered through a second-step merger at the same price.
  • An investment fund affiliated with GTCR LLC has entered into a tender and support agreement to tender its Paya shares, representing approximately 34% of the outstanding shares.
  • The Merger Agreement includes customary termination provisions and a termination fee of approximately $38 million if Paya accepts a superior proposal.

Impact on Paya

The acquisition of Paya by Nuvei has led to significant changes in operations and management. Paya's integrated payment capabilities are now part of Nuvei's global platform, enhancing their reach into high-growth verticals such as healthcare, non-profit, government, and utilities. The integration planning has been thorough, with both companies ready to operate as a unified team. Philip Fayer, Nuvei's Chair and CEO, expressed excitement about the complementary nature of the two companies and the strategic benefits of the acquisition, which include simplified technical stacks and better management of regulatory frameworks.

In terms of product offerings and services, the acquisition has expanded Nuvei's capabilities, allowing them to offer a more comprehensive set of payment and commerce solutions. Paya's focus on high-growth verticals complements Nuvei's existing offerings, providing enhanced customer propositions and incremental growth opportunities. Employee reactions have been positive, with leadership expressing satisfaction with the transaction's benefits for shareholders and employees. While specific customer reactions are not detailed, the strategic benefits and expanded service offerings imply a positive impact on customer experience.

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