Business Context and Reporting Period
This Form 8-K Current Report, dated August 13, 2019, details a material transaction by Repay Holdings Corporation (REPAY). The report announces the completion of the acquisition of TriSource Solutions, LLC ("TriSource"), a provider of back-end transaction processing services to independent sales organizations (ISOs).
Key Financial Metrics and Transaction Details
- Acquisition Consideration: Approximately $60 million in cash paid at closing.
- Contingent Consideration: A performance-based earnout of up to $5 million based on future results.
- Financing: Funded through a combination of cash on hand and committed borrowing capacity under REPAY's existing credit facility.
- Target Financials: TriSource processed $6.0 billion in payment volume during the year ended December 31, 2018.
- Historical Relationship: REPAY has utilized TriSource as a primary third-party processor since 2012.
Material Changes
The primary material change is the expansion of REPAY's operations through the acquisition of TriSource. This transaction converts a long-standing third-party vendor relationship into a majority-owned subsidiary, integrating TriSource's back-end settlement solutions directly into REPAY's infrastructure.
Outlook, Risks, and Unusual Items
- Future Filings: The Company will file required financial statements and pro forma financial information for TriSource within 71 days of August 19, 2019.
- Regulatory Disclosure: A press release regarding the acquisition was issued on August 14, 2019, under Regulation FD.
- Agreement Terms: The Purchase Agreement includes customary representations, warranties, covenants, and a post-closing working capital adjustment provision.
- Limitations: The filing text does not provide specific updated revenue, profit, or liquidity metrics for REPAY post-acquisition, nor does it detail the specific terms of the earnout metrics.
Investor Verification Checklist
- Verify the specific performance metrics triggering the $5 million earnout in the full Securities Purchase Agreement (Exhibit 2.1).
- Review the upcoming pro forma financial statements to assess the impact of the $60 million cash outflow on REPAY's liquidity and leverage ratios.
- Confirm the integration timeline and expected synergies from combining REPAY's merchant acquiring business with TriSource's processing capabilities.
- Monitor the utilization of the existing credit facility used to finance the deal.