Montréal-based FinTech startup Nuvei has entered a deal to acquire Paya Holdings, an American payments platform provider, for $1.7 billion CAD ($1.3 billion USD).
On Monday, Nuvei announced its intent to purchase Paya for $9.75 USD per share as the former looks to expand in the US and enter new verticals. Nuvei said it expects to finance the acquisition with a combination of cash on hand, and an existing as well as a new $600 million USD credit facility.
UPDATE: 22/02/2023: As of February 22, Nuvei has closed its acquisition of Paya.
“The proposed acquisition of Paya is a powerful next step in the evolution of Nuvei.”
– Philip Fayer, Nuvei founder
Established in 2003 by Philip Fayer, Nuvei provides tech-enabled payment solutions to merchants and partners. Its services include card issuing, banking, as well as risk and fraud management services. The startup’s customer base comprises firms that operate in the gambling, online retail, financial services, and travel sectors, among others.
Nuvei went public on the Toronto Stock Exchange in September 2020 with a $700 million USD IPO. As did most of Canada’s largest tech firms, Nuvei has seen its share price decline over the past year, by about 55 percent, as the sector contracts amid the downturn. Nuvei is trading at $35 USD at press time; in contrast, its stock was priced at around $84 in January 2022.
According to Nuvei, Paya’s integration will diversify the former’s business with markets that Paya currently serves such as B2B goods and services, healthcare, non-profit and education, as well as government and utilities.
Paya, which trades on the Nasdaq, saw its share price climb by about 24 percent following the news of Nuvei’s intent to acquire the company.
“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 [B2B], said Fayer.”
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Nuvei’s proposed transaction with Paya continues its active acquisition strategy, which largely focuses on integrating with firms that also offer financial technology.
In 2021, Nuvei acquired cryptocurrency startup Simplex in an all-cash deal totalling $250 million USD. In that same year, Nuvei also bought Mazooma for $56 million plus additional considerations. Mazooma, which is based in the United States, is a payments tech provider for gaming and sports gambling. In a landmark $1.1 billion CAD deal, Nuvei acquired SafeCharge in 2019, which offers a payment platform.
In Nuvei’s third quarter earnings report for 2022, it posted a seven percent increase in revenues for the quarter, reporting $197.1 million from $183.9 million last year. The company also posted a decrease in net income however, from $28 million to 13 million, representing a 54 percent decline. Nuvei attributes this loss to an increase in share-based payments.