Repay To Acquire Kubra Data Transfer LTD For ~ $372M

Repay Holdings Corporation (NASDAQ:RPAY) ("REPAY" or the "Company"), a leading provider of integrated payment processing solutions, today announced a definitive agreement to acquire Kubra Data Transfer LTD. ("KUBRA") for approximately $372 million. The acquisition will be financed with a combination of cash on hand and debt financing.KUBRA is a leading provider of bill payment and customer communication management solutions serving some of the largest utility and government entities, touching over 40% of households in the US and Canada. KUBRA offers an embedded technology platform comprising six core solutions across multiple verticals. Their highly reoccurring business model serves over 250 clients today with a deeply integrated offering to ERP providers across their core verticals.The transaction strengthens two complementary, vertical-leading businesses combining REPAY's extensive payment expertise and technology platform with KUBRA's attractive verticals, partnerships, and go-to-market approach. On a combined basis, the Company will have significant scale across diverse growth markets enabling over $130 billion in annual payment volumes."Today's announcement advances REPAY on our transformational journey to become a leading bill payment provider. The combination brings together highly complementary go-to-market approaches, creating robust opportunities to enhance growth, while also deepening client experiences and driving operational and financial efficiencies," said John Morris, Co-Founder and Chief Executive Officer of REPAY."We are excited to enter KUBRA's next phase by joining REPAY and creating a scaled payments platform," said Rick Watkin, President and Chief Executive Officer of KUBRA. "REPAY will enhance value for our clients, while helping to further pursue growth opportunities in our end markets. I am thrilled about the opportunities this transaction provides for KUBRA and our team."Compelling Strategic Rationale with Strong Value Creation OpportunitiesVertical Expansion: The acquisition of KUBRA adds attractive verticals such as utilities, government, and insurance. Going forward, go-to-market and sales teams will leverage the company's extensive payments capabilities, vertical expertise, and robust distribution channels across 18+ dynamic verticals.Creates Scale: REPAY's payment platform will have significant scale with combined 20251 Revenue and Adjusted EBITDA of approximately $548 million and $178 million, respectively.Value Creation Opportunities: The transaction is expected to generate approximately $15+ million of annual run-rate costs synergies and approximately $5+ million of technology savings over the next three years through combining operations, platform consolidation, and other scale efficiencies. REPAY expects the transaction to unlock additional value with expected revenue opportunities of approximately $5+ million by 2028 as REPAY benefits from offering bill presentment, communications services, a payment engine, and core processing solutions across all clients.Ramping Accretive Profile: REPAY expects Free Cash Flow accretion2 of 25% by 2028.Transaction DetailsREPAY will acquire KUBRA in an all-cash transaction for approximately $372 million, which is subject to customary purchase price adjustments. The transaction will be funded with cash on hand and debt financing. In connection with the transaction, REPAY has received a debt commitment letter from Truist Bank for a $500 million term loan, along with a $100 million undrawn revolving credit facility. At closing, REPAY expects net leverage3 of approximately 4.0x on a post-transaction basis and expects to reduce net leverage to below 3.0x within 18 months.