Forager Capital Management offered $1 billion for Atlanta-based Repay Holdings at $4.80 a share, a 75% premium to the stock’s 30-day volume-weighted average price of $2.75. The cash offer, dated April 17, covers the fully diluted 93.5 million shares outstanding and assumes Repay’s existing debt.
Forager already owns 13% of Repay. What does the buyer get? A payments processing services provider caught in the middle of its own $372 million deal to buy Kubra Data Transfer, a utility and government payments platform, and that deal has a shareholder revolt attached.
Repay’s board didn’t make this easy. When Forager first approached on April 13 for exploratory talks, the company immediately activated a shareholder rights plan, a classic poison pill. Forager Managing Partner Edward Kissel called that response “difficult to reconcile with a genuine commitment to maximizing shareholder value” and went public with the offer through an SEC filing.
Both sides have lawyered up: Forager brought in White & Case; Repay has Troutman Pepper Locke and Sullivan & Cromwell. Meanwhile, Veradace Partners, an 8.4% stakeholder, publicly objected to the Kubra deal on April 9 in its own press release.
Repay said it’s open to the offer and reviewing it with advisors. Forager noted there’s no guarantee talks result in a deal. The real question is whether Forager can close a $1 billion deal on a target that’s simultaneously fighting a shareholder revolt over its own acquisition.
— Diana Kowalski