The Canadian financial technology company Nuvei has recently announced its intention to acquire its American rival Paya, for a whopping $1.3 billion. Under the agreement, Nuvei will pay US$9.75 per share in cash.  

Nuvei is a leading international payment processing company, offering a wide range of payment solutions, including pay-in and payout, to businesses around the world. Founded in Montreal in 2003, Nuvei has been providing innovative payment solutions for almost twenty years now. It has quickly become one of the most trusted payment solutions providers in the payments industry, with customers ranging from small businesses to large enterprises with a special focus on high-risk merchants and industries such as gaming and travel.

Founded in 2006, Paya (known by the name Sage Payment Solutions while owned by the Sage Group until 2017), on the other hand, is a leading digital payments provider of integrated payment solutions ranging from payment acceptance and disbursement to fraud detection and risk management. Paya’s solutions are designed to enable businesses to accept payments online quickly and securely, in-store, and via mobile.

Nuvei’s CEO Philip Fayer said the deal will accelerate the company's integrated payment strategy and diversify its business into key verticals among which are B2B products and services, healthcare, non-profit and education, but also government and utilities.

In EDC’s view, the acquisition will help Nuvei capitalize on the growing market of integrated payment software, and benefit from Paya' existing business relationships. Indeed, Paya works with more than three hundred independent software vendor (‘ISV’) platforms, creating highly innovative software integrations and end-to-end commerce solutions, mainly into back-end accounting systems and front-end CRM. In addition, Paya’s software and payment capabilities are complementary to Nuvei’s global technology. Surely, the synergy will improve Nuvei’s customer proposition and create countless expansion opportunities for the payment service provider (‘PSP’) which will possibly create a whole new integrated suite of payment solutions tailored to the unique needs of its customers worldwide.

Subsequently, this will also allow Nuvei to better serve its existing customers, as well as reach out to new ones. It is acknowledged that Paya has a very strong footprint in the healthcare, non-profit, education, government, and utilities sectors. But it seems that the focus for Nuvei will be to grow its capabilities into the large and promising B2B payments market, with a focus on North America.

As per the latest Cantor Fitzgerald Initiating Coverage report, released in June 2021, the U.S. B2B payments middle market will grow at a 10%+ compound annual growth rate (CAGR) (2019-2026) with an estimated market size of $2.3 trillion in 2026. And, Paya has a strong history in that market, serving businesses such as independent software vendors, value added resellers, independent sales organizations, developers, or other merchants who can issue invoices, receive payments, optimize interchange rates, and make the most of easy reporting tools and analytics through a dedicated Paya partners portal.

Either way, the acquisition of Paya is just the latest move by Nuvei to expand its footprint and to become a major player in the payments landscape. It follows the acquisition of SafeCharge, a leading payment processor, in 2019, as well as the purchase of the cryptocurrency startup Simplex in 2021 and of Mazooma the same year, allowing the Canadian company to broaden its Alternative Payment Methods offer.

The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).