Priority Announces It Will Go Private in a $1.6 Billion Deal – Digital Transactions

An investor group led by Priority Technology Holdings Inc. chairman and chief executive Thomas Priore will take the processor private in a deal valued at $1.6 billion, or $8.05 per share in cash, Priority announced early Monday. The company’s closing share price on Friday was $5.83. The agreement follows a preliminary, non-binding proposal publicly disclosed in November. The deal, which will end the company’s nearly nine-year run as a public company, is expected to close in the first half of next year.

“After a comprehensive evaluation of the proposal, a rigorous valuation analysis, and extensive negotiations with Tom and his affiliates, we are delivering a transaction that provides compelling and certain value to Priority’s unaffiliated stockholders,” said Michael Passilla, chairman of a special committee set up to review the transaction, in a statement. “We believe this is the best path for the unaffiliated stockholders to realize the significant value from their investment in the company.”  Unaffiliated shareholders are those who do not have an executive role with the company, nor a controlling interest in it.

The committee, which was unanimous in supporting the deal, consisted of independent and disinterested directors, Alpharetta, Ga.-based Priority said. The group conducted a what Priority’s announcement said was a “robust” review of the transaction, relying on consultation with independent legal and financial advisors.

Priority, founded in 2005 by the brothers Tom and John Priore, reported second-quarter revenue of $262.3 million, up 9% from the same period last year, with an 8% increase in adjusted gross profit to $99.9 million. Revenue for the first half of the year rose 10% to $511,8 million, while gross profit hit $198.7 million, up 11%.

Priority disclosed in November it had received a preliminary, non-binding take-private proposal from the investor group.  At the time, the group proposed buying the shares it did not already own at a price ranging from $6 to $6.15 each, according to the company. The company’s announcement indicated Thomas Priore held about 58% of the company’s outstanding common stock.

Among its most recent deals, the company last month agreed to acquire Convenient Payments, which does business as Intellipay, a privately held processor based in Draper, Utah, for $11.5 million plus another $3.5 million in earn-out payments over eight quarters following the close. The company at nearly the same time agreed to process ticket sales for the Tampa Bay Buccaneers of the National Football League. That deal includes marketing rights that include branding in the stadium.

Priority has not been shy about expanding into new acquiring markets. It announced in October last year it had entered the market for processing automotive-servicing payments with its acquisition of DMSJV LLC, also known as Dealer Merchant Services, a payments provider whose capabilities include surcharging to help dealers cover transaction costs.