Payfare (TSX: PAY) has finally become a target for an acquisition, with the company this morning announcing it will be acquired by a subsidiary of Fiserv (NYSE: FI) in an all-cash transaction under a definitive agreement.
The transaction will see the company bought out for a total figure of $201.5 million, which equates to $4.00 in cash per share. The arrangement will see the “earned wage access” financial company acquired by a leading global provider of payments and financial services tech.
The price to be paid represents a premium of roughly 90% to Payfare’s closing price on Friday, which is a major win for the company after its fall from grace in October of this year when the company announced it had lost DoorDash as a client. DoorDash was Payfare’s largest client, with revenue from DoorDash representing a “substantial amount” of total revenues. Analyst estimates suggest the company accounted for as much as 80% of Payfare’s revenue. After the loss, the company saw its valuation wiped out, with shares dropping from $8.43 to $2.05 in a single day.
READ: Payfare Launches Strategic Review Following Loss Of DoorDash Agreement
“Our Board conducted a thorough strategic review process together with our financial advisors, having evaluated numerous acquisition, commercial partnership, and other opportunities, and concluded that the Transaction is in the best interests of the Company, its various stakeholders and its shareholders with certainty of value with an all-cash offer,” commented CEO Marco Margiotta on the acquisition.
The arrangement remains subject to shareholder approval, with the transaction expected to close in the first half of 2025 if approved. A date for the shareholder meeting has yet to be set.
Payfare last traded at $2.11 on the TSX.
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