Nuvei set to acquire Atlanta-based firm Paya for $1.3 billion

Nuvei, a fintech company based in Canada, has signed an agreement deal to buy Paya. Paya is an integrated payments provider based in Atlanta. Nuvei will be closing the acquisition for around $1.3 billion.

Nuvei to acquire Paya for $1.3 billion

Nuvei will pay $9.75 in cash for each Paya share to close this acquisition deal. This is according to a statement released by the two companies on Monday. Nuvei company provides an innovative payment infrastructure and payment options, while Paya offers commerce solutions for customers who want a convenient way to accept and make payments.

Nuvei said it planned to finance this acquisition deal using cash on hand, a credit facility, and it has also committed a new $600 million first lien secured credit facility. The Canadian firm further explained that with this acquisition, it would expand its business-to-business services while focusing on its growth strategy.

Nuvei also plans to become a “preeminent payment technology provider” after this acquisition deal, according to the company’s Chairman and Chief Executive Officer, Philip Fayer.

In an interview with Reuters, Fayer said, “We’re really excited about talking Paya’s capabilities and plugging them into our global payments infrastructure.” the executive noted that the merged company would derive around 50% from the United States. Currently, the firm generates around 40% of its revenues from Canada and the US.

For this acquisition deal, Nuvei is advised by Barclays Capital alongside BMO Capital Markets, RBC Capital Markets, and Evercore Group LLC. On the other hand, Paya is being advised by JPMorgan Securities LLC.

The news of the acquisition seems to be positively affecting Nuvei shares, as they are up 2.72% today to trade at around $37.40. On the other hand, Paya shares were below the offer price but increased following the news.

Before Paya entered a SPAC transaction to go public, it was controlled by the GTCR private equity firm. The firm still holds around 34% of the company’s stock. The statement noted that GTCR would also support this acquisition. The companies have been transparent with the financials for the acquisition, with analysts saying that the $1.3 billion is a healthy valuation in the current environment.

How did the payments industry perform in 2022?

The acquisition of Paya came when the payments industry witnessed a significant decline in numbers over the past year. Data from KPMG shows that investments in the global fintech sector plunged by 3.1% to $107.8 billion. During the previous year, the industry had reported $111.2 billion.

The notable decline in the fintech industry has led to multiple negative effects. The industry accounted for some of the most layoffs reported in 2022. Moreover, the industry also recorded several firms leaving because of the harsh climate. Some companies that left the sector include Dozens which closed its UK banking division, Nirvana Money, Germany Planetly, fast, and Australia’s Volt Bank.