Paya, an eCommerce FinTech, plans to go public through a special kind of merger with an investment company, according to a press release. The combined company will be known as Paya and will be listed on the NASDAQ as “PAYA.”
Private-equity firm GTCR is currently the majority owner of Paya and will remain the company’s largest shareholder. The deal values Paya at about $1.3 billion, according to the release.
Paya is set to merge with FinTech Acquisition Corp. III, which is a special-purpose acquisition company. SPACs are shell companies that raise money, which can then be used later for an acquisition. Typically when that deal occurs, the target company goes public.
The complicated transaction includes commitments for a $250 million common stock private placement from investors that include Franklin Templeton and Wellington Management Company.
The deal is part of the move toward market consolidation for FinTechs. Such dealings involve companies such as small business lending platform Kabbage, Ansonia Credit Data and B2B credit and payments systems provider MSTS.
According to Paya, the company has more than 100,000 customers and partners with software providers in markets that include B2B goods and services, healthcare, nonprofit and faith-based organizations, utilities and education.
“We are excited to partner with FinTech III to accelerate our path to becoming a public company,” said Paya CEO Jeff Hack in the announcement. “As a publicly listed company, we will continue to invest in the product innovation and the support our software partners rely on to meet the needs of their clients, as well as have access to capital for additional strategic acquisitions."
Betsy Z. Cohen, chairman of FinTech III, added, "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.”
The release said that GTCR is a long-time investor in financial technology and has a successful track record of supporting fast-growing payments companies, including previous investments in VeriFone, Syniverse and Transaction Network Services.