REPAY to Acquire B2B Payments and Accounts Payable Automation Provider CPS Payment Services

CPS Payment Services

Acquisition to Add Significant Scale to REPAY’s Accounts Payable Automation Business, Enhance Existing Healthcare B2B Business and Accelerate Expansion into New Verticals

ATLANTA–(BUSINESS WIRE)–Oct. 27, 2020– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced it has signed a definitive agreement to acquire CPS Payment Services (“CPS”) for up to $93 million, of which $78 million will be paid at closing. The acquisition will be financed with cash on hand. The transaction is expected to close in the fourth quarter of 2020, subject to certain customary closing conditions.

CPS, founded in 2011 and headquartered in Atlanta, GA, is a B2B payments and accounts payable (“AP”) automation technology provider that facilitates the issuance, execution, and reconciliation of virtual card, enhanced ACH, ACH, and check payments through an integrated software platform. CPS’s offering is highlighted by its proprietary AP automation software, the CPS Payment Portal, which provides purpose-built, highly configurable workflow management and automation across the entire B2B payments lifecycle from ERP integration to payment execution and reconciliation. CPS has developed a proprietary database of over 20,000 virtual card and enhanced ACH accepting suppliers and serves an expanding base of over 160 enterprise clients across various sectors, with deepest representation in healthcare, education, government, media, and hospitality.

“There continues to be increased demand for comprehensive, technology-first B2B automation and payment solutions, as enterprise customers look to reduce costs and operate more efficiently in an increasingly digital environment. With their expanding sales channels, proprietary payment portal, integration capabilities and growing client base, CPS will substantially enhance REPAY’s comprehensive B2B offering. This acquisition will bring us the opportunity to introduce REPAY’s solutions to new verticals, including education, government, and media sectors,” said John Morris, CEO of REPAY. “We are looking forward to welcoming the CPS team into the REPAY family and pursuing some amazing growth opportunities ahead.”

“We are excited to work with such a proven industry leader to capitalize on the growing demand for AP automation solutions. The rapid growth of our business combined with REPAY’s extensive resources, expanding suite of solutions, and proven success in scaling operations puts us in a great position to establish a true industry powerhouse in B2B payments. We are looking forward to working together to offer a more robust solution for our existing and future clients,” said Wade Eckman, President and CEO of CPS.

Transaction Details

  • REPAY will acquire CPS for up to $93 million
    • $78 million will be paid in cash at closing
    • Up to $15 million may become payable through two separate earnouts, which are dependent upon CPS’s performance over various periods through December 31, 2022
  • The acquisition will be financed with cash on hand
  • Net leverage is expected to approximate 2.2x1 on a post-transaction basis
  • In 2020, CPS is expected to generate net revenue of over $10 million, with gross and adjusted EBITDA margins of approximately 70% and 40%2, respectively

Strategic Rationale

  • Immediate Scale and Diversification
    • CPS serves 160+ enterprise clients across multiple attractive end-markets with strong gross and net volume retention
    • CPS’s solutions are integrated with over 25 ERP and accounting software platforms
    • The acquisition will bring REPAY into new verticals, including education, government, and media, and enhances REPAY’s existing healthcare B2B business
    • The acquisition is expected to increase REPAY’s total B2B payment volume to over $4 billion and expand REPAY’s virtual card and enhanced ACH accepting supplier network to over 50,000
  • Enhances B2B Offering
    • This acquisition will strengthen REPAY’s existing AP automation business
    • CPS automates the dynamic issuance, execution, and reconciliation of supplier payables through its highly configurable and integrated technology platform, ongoing supplier enablement efforts, and best-in-class client services
    • CPS’s Payment Portal provides an end-to-end AP payments disbursement system that enables ERP / accounting system integration and workflow automation across the entire B2B payments lifecycle
    • CPS has the opportunity to unlock significant growth potential by cross-selling its new TotalPay solution to capture greater wallet share across its existing base
      • With the roll-out of TotalPay, CPS will be able to manage check and ACH payments across its entire client base, and have the opportunity to convert additional spend into fee-based electronic payments (enhanced ACH or virtual card)
    • There is a significant opportunity to accelerate future growth with CPS through the continued roll-out of its TotalPay solution and by harvesting recently signed referral partnerships and financial institution relationships
  • Sizeable and Growing Addressable Market
    • CPS’s existing healthcare, education, government, media, and hospitality ERP integrations present CPS with an estimated payment volume opportunity of $880 billion
    • CPS, as well as REPAY’s existing B2B business, has experienced favorable trends as a result of the COVID-19 pandemic, which has accelerated a broader paper-to-digital transition within B2B automation and payments
    • The acquisition is anticipated to further advance REPAY’s position in the $25 trillion U.S. B2B payments market

Advisors

William Blair acted as exclusive financial advisor and Alston & Bird served as legal counsel to CPS in connection with the transaction. Troutman Pepper served as legal counsel to REPAY in connection with transaction.

Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, sales opportunities and growth, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding the expected impact of the COVID-19 pandemic, REPAY’s industry and market sizes, anticipated benefits from, and the expected timing for completion of the CPS acquisition, future opportunities for REPAY, including CPS, as well as the level of CPS’s growth and financial contributions. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors previously disclosed in prior reports filed with the U.S. Securities and Exchange Commission and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread (which impacts are highly uncertain and cannot be reasonably estimated or predicted at this time); a delay or failure to complete, integrate and/or realize the benefits of the CPS acquisition and any difficulties associated with marketing products and services in the AP automation market to REPAY’s existing B2B customers; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets; risks relating to REPAY’s relationships within the payment ecosystem; the risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to develop and maintain effective internal controls.

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants, while enhancing the overall experience for consumers and businesses.


1Calculated based on the estimated twelve months ending December 31, 2020 pro forma Adjusted EBITDA of REPAY, Ventanex, cPayPlus, and CPS on a combined basis, after giving effect to cash from the primary offering and warrant exercises, less the $78 million upfront purchase price.

2 Includes certain cost synergies and pro forma adjustments.

Investor Relations for REPAY:
repayIR@icrinc.com

Media Relations for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com

Source: Repay Holdings Corporation

REPAY to Announce Third Quarter 2020 Results on November 9, 2020

ATLANTA–(BUSINESS WIRE)–Oct. 22, 2020– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today announced that the Company will host a conference call to discuss third quarter 2020 financial results on Monday, November 9, 2020 at 5:00pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. A press release with third quarter 2020 financial results will be issued after the market closes that same day.

The conference call will be webcast live from the Company’s investor relations website at https://investors.repay.com/ under the “Events” section. The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available two hours after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13711329. The replay will be available until Monday, November 16, 2020. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants, while enhancing the overall experience for consumers and businesses.

Investor Relations Contact for REPAY:
repayIR@icrinc.com

Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com

Source: Repay Holdings Corporation

REPAY Announces Integration With Mortgage Industry Leader Ellie Mae

Partnership enables mortgage originators with the ability to accept digital payments, enhance customer experience and drive efficiency for interim serviced loans

ATLANTA–(BUSINESS WIRE)–Oct. 7, 2020– Repay Holdings Corporation (NASDAQ:RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced its partnership with Ellie Mae, the leading cloud-based loan origination platform provider for the mortgage industry and now part of Intercontinental Exchange, Inc. (NYSE:ICE). The newly formed partnership will include an integration between Ventanex, a REPAY Company, a major provider of payments and messaging solutions to the mortgage industry and the Ellie Mae® Digital Lending Platform.

Ventanex’s LIFT platform will enable mortgage originators utilizing the Ellie Mae Digital Lending Platform to receive one-time electronic loan payments via ACH or card across multiple channels, including web, mobile, agent, and IVR. Ventanex’s integrated solution provides an easy-to-use, simple interface for administrators, agents, and borrowers, further enhancing the overall customer experience. The integration will also drive efficiency by eliminating time-consuming, manual legacy processes, and reducing the overall cost affiliated with check acceptance. Additionally, borrowers can make one-time payments for fees or other items either during or after the mortgage origination process.

“We are thrilled to be partnering with Ellie Mae, Inc. and we are confident that this integration will be a valuable tool to those using the platform for loan origination and payments,” says Susan Perlmutter, Chief Revenue Officer, REPAY. “REPAY looks forward to helping mortgage originators and consumers utilizing the Ellie Mae platform further streamline their payment processes, reduce costs, and provide a more seamless user experience.”

Ellie Mae is the leading cloud-based loan origination platform provider for the mortgage industry. The Ellie Mae Digital Lending Platform empowers lenders and investors to engage homebuyers and efficiently originate, close, sell and purchase loans that maximize ROI across their business all from a single system of record. The platform delivers a true digital mortgage experience across the entire mortgage workflow for every channel, every loan transaction and every customer type.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants, while enhancing the overall experience for consumers and businesses.

Investor Relations for REPAY:
RepayIR@icrinc.com

Media Relations for REPAY:
RepayPR@icrinc.com

Source: Repay Holdings Corporation

REPAY Enhances Mortgage Servicing Suite With New Service To Automate Loan Transfer Payments Between Mortgage Servicers

Service Transfer Exchange (STX) automates the routing of borrower payments between lenders when mortgage servicing rights are transferred

ATLANTA–(BUSINESS WIRE)–Oct. 6, 2020– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced its newest offering, Service Transfer Exchange (STX)—a service to streamline mortgage service transfers between lenders.

Ventanex, a REPAY company, is powering STX through its LIFT payment and messaging platform. Using LIFT’s PaymentIQ exception management module, STX automates payment processing and routing between servicers—reducing errors and creating a seamless borrower experience.

While much of the service transfer process is automated, many manual steps remain during the 60-day consumer grace period after a sale. Both sending and receiving loan servicers are responsible to provide physical check processing, manual data entry and analysis, and shipment processing when borrowers mail payments to the wrong name and address. These time-consuming, labor-intensive inefficiencies become automated with STX.

“Today’s low mortgage rates have sparked a boom in mortgage service transfers—so efficiency and accuracy matter more than ever,” says Susan Perlmutter, Chief Revenue Officer, REPAY. “We identified an increased need to streamline efficiencies for mortgage lenders. STX makes transfers easier for servicers—and reduces errors that can slow the process and alienate borrowers.”

“PaymentIQ was built to untangle complex scenarios just like this,” notes Todd Harbison, vice president for Ventanex. “By moving complex payments from manual to digital processing, it gives STX the power to identify service-released items and forward them automatically and electronically to the new servicer.”

Ventanex LIFT platform allows mortgage servicers to leverage a robust suite of borrower engagement and intelligent payment processing tools. By harnessing the most advanced technologies, Ventanex offers convenient payment methods consumers prefer, applies rules across channels, collects appropriate fees and reduces costs—all while ensuring compliance.

To learn more about Service Transfer Exchange (STX), please visit www.stxmortgage.com.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants, while enhancing the overall experience for consumers and businesses.

About Ventanex

Ventanex, a REPAY company, is a transaction technology innovator that helps companies serve customers better and be more profitable through integrated, intelligent management of inbound payments, outbound payments and consumer messaging.

Visit Ventanex.com to learn more.

Investor Relations Contact for REPAY:
RepayIR@icrinc.com

Media Relations Contact for REPAY:
RepayPR@icrinc.com

Source: Repay Holdings Corporation