TPG of Texas provides payment solutions to more than 600 utility companies and municipalities.
Terms of the deal were not disclosed.
The announcement Monday (Sept. 21) follows Paya’s decision to go public through a merger with FinTech Acquisition Corp. III, a special-purpose acquisition company (SPAC), or a company that raises money which can then be used later for an acquisition. The combined company will keep the Paya name and be listed on the NASDAQ as “PAYA.”
GTCR, a Chicago-based private equity firm focused on leveraged buyouts, is the majority owner of Paya and will remain the company’s largest shareholder. The deal values Paya at about $1.3 billion, the company said.
The TPC deal marks Paya’s second acquisition in the government and utilities integrated payments sector.
With the sale, Paya said it will invest in TPG’s sales efforts, add to TPG’s technology and expand marketing to boost the adoption of electronic payments among TPG’s customers.
In addition, Paya said it will integrate TPG’s online billing and software applications into its payments platform. Paya said it has more than 100,000 customers and about $30 billion in annual payments.
“The acquisition will allow us to provide enhanced solutions to local governments and municipalities as they offer their residents the ability to make digital payments for services like utility and court bills,” said Paya CEO Jeff Hack in a statement.
Since 2003, TPG has worked with more than 600 municipalities to provide ways for customers to pay their tickets and utility bills digitally.
“This combination benefits TPG clients by offering them expanded services for their constituents,” said Ariel Kunar, CEO of TPG. “We are excited to leverage Paya’s extensive resources and reputation for excellent service to municipal and utilities clients.”
Paya previously acquired Stewardship Technology in late 2018 and First Billing Services in 2019, which expanded its growth and product offerings in the non-profit and government spaces, respectively.
“The COVID-19 pandemic is accelerating the shift to digital payments, and TPG provides an affordable solution to smaller municipalities to enable citizens to pay their bills online,” said KJ McConnell, principal at GTCR, in a statement.
The transaction is expected to close next month.