Payfare Inc. (TSX: PAY, OTCQX: PYFRF), a prominent player in the international Earned Wage Access (EWA) sector, has announced its entry into a definitive agreement for acquisition by Fiserv, Inc. (NYSE: FI), a global leader in payments and financial services technology. This strategic move is set to bolster Payfare’s capabilities in providing instant access to earnings and digital banking solutions for workforces.
Under the terms of the agreement, Fiserv will acquire all outstanding common shares of Payfare for CA$4.00 per share, amounting to an estimated total consideration of CA$201.5 million. This purchase price reflects a significant premium of approximately 90% over Payfare’s closing share price on December 20, 2024, just prior to the announcement. The deal also represents a premium of about 92% compared to the 60-day volume-weighted average trading price as of that date.
Marco Margiotta, CEO and Founding Partner of Payfare, expressed confidence in the transaction, stating that it recognizes the value and strength of Payfare’s offerings while providing stakeholders with certainty through an all-cash offer. Frank Bisignano, Chairman and CEO of Fiserv, highlighted the potential for accelerated delivery of embedded finance solutions that will empower clients in their future endeavors.
The decision to pursue this acquisition follows a comprehensive strategic review process conducted by Payfare’s board alongside financial advisors. The board unanimously concluded that this transaction aligns with the best interests of the company and its shareholders. The arrangement is designed to be executed through a court-approved plan under British Columbia’s Business Corporations Act, necessitating approval from two-thirds of voting shareholders at a special meeting.
Several key factors influenced this decision, including the significant premium offered by the purchase price, which promises substantial returns for shareholders. A thorough review process was conducted, evaluating multiple acquisition and partnership opportunities, but none surpassed this deal. Additionally, independent financial advisors provided fairness opinions that confirmed the transaction is financially fair to shareholders. Finally, the all-cash nature of the offer assures shareholders of immediate liquidity, enhancing the certainty of value.
The transaction is subject to customary closing conditions, including shareholder approval and court validation. Payfare intends to hold a special meeting where shareholders will vote on the proposal. All directors and senior officers have committed to supporting the transaction through voting agreements.
Upon successful completion, Payfare’s shares will be delisted from both the Toronto Stock Exchange (TSX) and OTCQX markets. The company will also apply to cease being a reporting issuer under Canadian securities laws.
This acquisition marks a significant step for both companies as they aim to enhance their service offerings within the rapidly evolving landscape of workforce payments. By integrating Payfare’s innovative EWA solutions with Fiserv’s extensive financial technology infrastructure, they are poised to deliver enhanced value to clients across various sectors.
As companies increasingly prioritize financial wellness for employees, this merger could set new standards in workforce payment solutions, potentially reshaping how gig-economy workers access their earnings. The acquisition represents a strategic alignment aimed at leveraging combined strengths in financial technology and workforce payment solutions.
