Paya Inc., an integrated payments company, announced on Monday its merger with FinTech Acquisition Corp III, a special purpose acquisition company (SPAC), thus, confirming its listing on NASDAQ.
With this deal, the combined value of the company amounts to $1.3 billion. Although, GTCR, the existing parent company of Paya, will continue to be the largest shareholder of the merged entity.
Commenting on the merger, Paya CEO Jeff Hack said: “We are excited to partner with FinTech III to accelerate our path to becoming a public company and greatly appreciate GTCR’s continued investment and support.
“As a publicly listed company, we will continue to invest in the product innovation and support our software partners rely on to meet the needs of their clients, as well as have access to capital for additional strategic acquisitions.”
Reverse Merger – a Quick and Safe Way to Go Public
SPACs are shell companies that source investment from an initial public offering (IPO) to get listed on an exchange. They are later acquired by other companies that facilitate a reverse merger.
This public listing route has become popular among companies that are not confident about a direct approach with an IPO.
For example, FinTech Acquisition raised $345 million from its IPO back in November 2018.
Nowadays, Paya, headquartered in Atlanta, Georgia, is targeting both small and medium-sized enterprises. These firms are located in the United States and Canada, and until now, it has acquired 100,000 customers. With services like its proprietary card and ACH platform, the company has processed a total of $30 billion in transaction value.
Though, in 2017, Paya’s market value was estimated to be only $260 million when it was acquired by GTCR.
“Integrating payment solutions with software is the fastest-growing segment of the payments industry, and Paya is perfectly positioned as the partner of choice for sophisticated software providers and middle-market business clients across multiple attractive verticals,” Betsy Z. Cohen, chairman of the board of directors of FinTech III, said.