Blockchain
Priority Technology Holdings, Inc. to Acquire Finxera to Create the Premier Payments and Banking as a Service Platform
Priority Technology Holdings, Inc. (NASDAQ: PRTH) (“Priority”), a leading payments technology company, and Finxera Holdings, Inc. (“Finxera”), a pioneer in the fintech industry that launched and operated one of the first Banking as a Service (“BaaS”) platforms, today announced they have entered into a definitive agreement to merge. Finxera will operate as a wholly owned subsidiary of Priority. The transaction is expected to close in the third quarter of 2021.
Priority’s omni-channel payments platform supports proprietary and third-party software applications built for businesses of any size. Priority’s offering combines modern cloud infrastructure and operational expertise to deliver unparalleled Payment Infrastructure as a Service (“PIaaS”) to organizations with complex payment operation needs, including low friction merchant boarding, underwriting, risk management, and compliance monitoring. Finxera’s BaaS technology allows for the rapid integration of banking services into business applications to establish and manage bank accounts for the collection, storage, and sending of money. When combined, Priority will offer clients turn-key merchant services, payment facilitation, card issuing, automated payables, virtual banking, and e-wallet tools supported by its best-in-class client service, risk management, underwriting and compliance on a single platform.
“The Finxera acquisition accelerates Priority’s position as a market leader in the convergence of payments and banking as a service” said Tom Priore, Chairman and Chief Executive Officer of Priority. “Our combined platform will be equipped to take and make payments whether on card, ACH, or even blockchain and manage all aspects of payment operations like onboarding, risk, compliance, and client service for our clients. Together we will be a one stop-shop for payments and virtual bank account management that today’s merchants and modern software companies are seeking in order to manage and monetize their payment networks.”
To learn more about the combined technology platform and financial profile please click on the following link.
http://prth.com/assets/Mar-8-IR-Presentation.pdf.
The Company will host a conference call and webcast to discuss the Finxera acquisition. A
question-and-answer session will follow.
Monday, March 8, 2021
4:00 pm Eastern Time
Phone: US/Canada: (877) 501-3161 or International: (786) 815-8443
Internet webcast link can be accessed at https://edge.media-server.com/mmc/p/x36gfbdx
and will also be posted, along with an accompanying slide presentation, in the “Investor
Relations” section of the Company’s website at www.PRTH.com. An audio replay of the call will be available shortly after the conference call until March 11, 2021 at 7:00 pm Eastern Time. To listen to the audio replay, dial (855) 859-2056 or (404) 537-3406 and enter conference ID number 6988859. Alternatively, you may access the webcast replay in the “Investor Relations” section of the Company’s website at www.PRTH.com.
“Combining with Priority accelerates our original vision to be a disruptive technology in the convergence of payments and banking as a service,” said Sanjoy Goyle, Founder and Chief Executive Officer of Finxera. “We have been hugely impressed with the breadth of Priority’s payments platform, operations, and strategic vision since integrating with the Priority MX platform last year. We look forward to the further combination of the BaaS technology and operations.”
Finxera shareholders, including funds managed by Stone Point Capital LLC (“Stone Point“) and Finxera management team, will retain meaningful equity positions in the combined enterprise, with Goyle and Finxera’s Co-Founder and Chief Technology Officer Praveer Kumar, taking on prominent roles going forward. “We are excited to add Stone Point as a new long-term shareholder of Priority,” said Priore. “Stone Point has an exceptional track record of success as a financial services investor; their ongoing participation will be tremendously valuable to our growing enterprise.”
Financing
The merger financing with Finxera includes up to $50 million of Priority common stock to be issued to certain existing shareholders. Additionally, Priority has executed a commitment from Truist for a total debt facility of $630 million to refinance a portion of Priority’s existing debt, to add a new revolving credit facility and to finance a portion of the Finxera closing.
Simultaneous with entry into the merger agreement, Priority obtained an up to $250 million preferred equity commitment from funds managed by certain affiliates of Ares Management to fund a portion of the refinancing of Priority’s existing credit facilities and the acquisition of Finxera, with the remainder to be used to fund future acquisitions. “We are pleased to continue our relationship with Truist and to expand our relationship with Ares Management and Stone Point Capital,” said Priore.
Pro-Forma Highlights
Based upon forecasted 2021 financial results of Priority and Finxera, the pro forma full year 2021 results of the combined company are expected to be:
- Revenue of approximately $540 million
- Adjusted EBITDA of approximately $130 million
- Free cash flow of approximately $60 million
- Net leverage ratio below 4.25x
Schulte Roth & Zabel served as legal counsel to Priority. Truist Securities served as financial advisor to Finxera and Kramer Levin Naftalis & Frankel LLP served as its legal counsel. Cowen served as sole placement agent in connection with the preferred equity investment by Ares Management.
Use of Non-GAAP Financial Information
Priority supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information, including adjusted EBITDA, free cash flow and net leverage ratio, to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. Priority has not provided a reconciliation of the expected adjusted EBITDA, free cash flow or net leverage ratio contribution by Finxera to the comparable GAAP measures because it is unable to quantify certain amounts that would be required to be included in Finxera’s contribution to such comparable measures without unreasonable efforts due to the unavailability of the information needed to calculate reconciling items. In addition, Priority believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors. The non-GAAP financial measures disclosed by Priority in this press release should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated.
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Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin)
Blockchain technology continues to drive innovation across industries, reshaping finance, infrastructure, and philanthropy. Today’s news roundup explores exciting developments in blockchain ETFs, tokenization funding, quantum-resistant chips, public blockchain initiatives, and impactful social projects. Here’s a deep dive into the latest blockchain headlines:
BlackRock ETF Embraces Blockchain with First Muni Bond Purchase
BlackRock’s blockchain-focused ETF has made its first foray into municipal bonds, signaling increased confidence in integrating blockchain technology with traditional finance. The ETF’s strategic investment demonstrates how blockchain can enhance transparency and efficiency in bond markets.
By tokenizing municipal bonds, BlackRock aims to simplify trading and settlement processes while reducing associated costs. This development underscores the growing role of blockchain in transforming financial instruments and fostering greater market accessibility.
Source: Yahoo Finance
Plume Secures Funding for Tokenization Platform
Blockchain fintech company Plume has raised significant funding to advance its tokenization platform. The company’s innovative approach enables businesses to convert real-world assets into digital tokens, streamlining asset management and unlocking liquidity.
Tokenization is rapidly gaining traction as a game-changer in sectors such as real estate, art, and commodities. Plume’s success reflects a broader trend of investment in blockchain solutions that bridge the gap between traditional assets and decentralized technologies.
Source: Fortune
SEALSQ and Hedera Partner for Quantum-Resistant Blockchain Chips
SEALSQ and Hedera have announced a groundbreaking collaboration to develop quantum-resistant chips designed to secure blockchain infrastructure. These advanced chips will provide robust protection against future quantum computing threats, ensuring the integrity of blockchain networks.
As quantum computing capabilities evolve, safeguarding blockchain ecosystems becomes increasingly critical. This partnership highlights the importance of proactive measures in maintaining the resilience and trustworthiness of decentralized systems.
Source: The Quantum Insider
Deutsche Bank’s Public, Permissioned Blockchain Initiative
Deutsche Bank’s Layer 2 blockchain solution is set to go public and operate as a permissioned network, according to its tech partner. This initiative aims to strike a balance between accessibility and security, leveraging blockchain to streamline financial services and enhance operational efficiency.
The decision to adopt a public, permissioned model reflects a growing trend among enterprises seeking to harness the benefits of decentralization while maintaining control over sensitive data. Deutsche Bank’s approach could serve as a blueprint for other financial institutions exploring blockchain adoption.
Source: CoinDesk
KuCoin’s “Light Up Africa” Initiative Brings Hope to Thousands
Cryptocurrency exchange KuCoin has made a significant impact through its “Light Up Africa” donation ceremony in Ghana, benefiting 36,000 children across the continent. The initiative combines blockchain technology with philanthropy to address energy poverty and support education.
By leveraging blockchain for transparency in charitable contributions, KuCoin sets an example of how the crypto industry can drive meaningful social change. The project demonstrates the potential of blockchain to empower communities and foster sustainable development.
Source: PR Newswire
Industry Implications and Key Takeaways
Today’s developments highlight the transformative potential of blockchain across multiple domains:
- Integration with Traditional Finance: BlackRock’s ETF underscores the synergy between blockchain and established financial systems.
- Tokenization Trends: Plume’s funding success reflects the growing demand for digital asset solutions.
- Quantum-Resistant Technologies: SEALSQ and Hedera’s partnership addresses emerging cybersecurity challenges.
- Enterprise Blockchain Adoption: Deutsche Bank’s public, permissioned network showcases the adaptability of blockchain in financial services.
- Social Impact: KuCoin’s philanthropic efforts illustrate blockchain’s capacity to drive positive societal outcomes.
The post Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin) appeared first on News, Events, Advertising Options.
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