Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced it has acquired Payix for up to $115 million. The acquisition was financed with cash on hand and available revolver capacity. REPAY also announced the upsizing of its revolver capacity by $60 million, increasing its existing $125 million Revolving Credit Facility to $185 million.
Founded in 2016 and based in Fort Worth, Texas, Payix is a leading omni-channel payment technology platform providing solutions that facilitate payments, data exchange, and communication to support customer service and collection efforts in loan repayment verticals. Payix’s software supports a wide range of payment options and modalities, and integrates into loan management systems (“LMS”) and dealer management systems (“DMS”) by providing a SaaS approach to collections technology.
“We are thrilled about the acquisition of Payix, a highly complementary business to REPAY,” said John Morris, CEO of REPAY. “With its robust and highly flexible technology platform, Payix creates a uniquely positive experience and adds value for both the lender and borrower. Payix also has a strong pipeline and product roadmap, positioning it well for 2022 and beyond. We look forward to welcoming the Payix team into the REPAY family.”
Transaction Details
- REPAY acquired Payix on a cash-free, debt-free basis for up to $115 million
- $95 million paid at closing
- Up to $20 million may become payable through an earnout, which is contingent on Payix’s performance in 2022
- Net leverage is expected to approximate 3.6x1 on a post-transaction basis and is expected to be below 3.0x by year end 2022
- In 2022, Payix is expected to generate revenue of over $15 million, with gross and adjusted EBITDA margins of approximately 65% and 40%, respectively
- On an organic basis, Payix top line and gross profit are growing substantially faster than the overall REPAY historical corporate average. Based on historical growth trends, Payix is expected to generate top line and gross profit growth in excess of 40% annually through 2023
Strategic Rationale
- Further enhances REPAY’s position in the large and growing automotive vertical, and accelerates expansion into the attractive buy now, pay later (“BNPL”)space
- Payix has generated strong topline growth and has highly predictable and recurring transaction revenue
- Complementary sales distribution model, driven by deep integrations with leading LMSand DMS platforms to accelerate new merchant acquisitions
- Payix’s platform serves 300,000+ underlying borrowers
- Proprietary software platform, offering a wide range of omni-channel borrower payment options including via mobile app, web, SMS, agent-assisted, and interactive voice response (“IVR”)
Advisors
Troutman Pepper served as legal advisor to REPAY. Capstone Partners served as exclusive financial advisor and Gunderson Dettmer served as legal advisor to Payix.
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