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REPAY Announces the Acquisition of cPayPlus

Accounts Payable Automation Acquisition Strengthens B2B Offering

Repay Holdings Corporation, a leading provider of vertically-integrated payment solutions, announced the acquisition of cPayPlus, LLC for up to $16.0 million, of which $8.0 million was paid at closing. The remaining $8.0 million may become payable in the third quarter of 2021, dependent upon the achievement of certain growth targets. The closing of the acquisition was financed with cash on hand and will not materially impact REPAY’s net leverage.

cPayPlus, founded in 2017 and headquartered in Salt Lake City, UT, is an accounts payable (“AP”) automation provider to a variety of industries, with concentrations in automotive, property management, and field services. cPayPlus’ robust technology platform, which is deeply integrated with its clients’ AP workflows and primary enterprise resource planning (“ERP“) systems, enables meaningful client-side operating efficiencies and seamless payment optimization. cPayPlus boasts an impressive list of ERP integrations in the automotive (e.g., Dealertrack and DealerBuilt), property management, and field services industries. cPayPlus currently maintains over 26,000 enrolled supplier relationships.

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“We continue to observe unprecedented demand for comprehensive, technology-first B2B automation and payment solutions, as enterprise customers look for ways to reduce costs and operate more efficiently in an increasingly digital environment. The competition typically focuses on either accounts receivable (“AR”) or AP. While we already do both, the cPayPlus acquisition will strengthen our AP automation offering, further enabling us to deliver best-in-class solutions that address all of our clients’ AR and AP automation and payment needs,” said John Morris, CEO of REPAY. “We are thrilled to welcome the cPayPlus team into the REPAY family. Darin Horrocks and Seth Barnard are AP automation veterans. We are confident that their leadership and vision will prove invaluable as we work together to accelerate growth in our B2B business.”

“We look forward to working with REPAY to capitalize on the ever-increasing demand for AP automation solutions. The already high need for our product has been amplified since the onset of the COVID-19 pandemic. REPAY’s extensive resources will enable us to take advantage of this demand and develop more complete B2B offerings for our clients,” said Darin Horrocks, CEO of cPayPlus.

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Transaction Details

  • REPAY acquired cPayPlus for up to $16.0 million
    • $8.0 million was paid in cash at closing
    • Up to $8.0 million may become payable in the third quarter of 2021, dependent upon the achievement of certain growth targets
  • The acquisition was financed with cash on hand
  • Net leverage is expected to approximate 1.25x1 on a post-transaction basis
  • While cPayPlus is not expected to make a material financial contribution for the remainder of 2020, cPayPlus’ top line and gross profit are growing substantially faster than the overall REPAY corporate average. cPayPlus is expected to deliver a more meaningful contribution in 2021. Based on historical growth trends, we expect cPayPlus to generate top line and gross profit growth in excess of 100% annually through 2022.

Pro forma for the cash from the primary offering and the warrant exercises, less the $8.0 million upfront purchase price

Strategic Rationale

  • High Growth Market
    • The B2B automation and payments market, including both AR and AP solutions, is experiencing rapid growth, as the abundance of greenfield opportunities is complemented by increasing penetration amongst SMB clients that have already adopted digital AR and AP automation and payment capabilities
    • cPayPlus, 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
  • Sizeable Addressable Market
    • cPayPlus’ existing automotive, property management, and field services ERP integrations present cPayPlus with an estimated payment card volume opportunity of $540 billion
    • cPayPlus intends to employ REPAY’s integration-oriented competencies to quickly unlock more of the estimated +$10 trillion market for SMB AP payment volume
  • Complementary Offering
    • The majority of REPAY’s current B2B business is focused on software automation and payment solutions around the AR side of transactions. The acquisition of cPayPlus will enable REPAY to provide both AP automation and payment solutions to its existing client base
    • While cross-sell opportunities exist across all of REPAY’s current businesses, the effects are expected to be particularly impactful amongst REPAY’s B2B and automotive customers
    • Additionally, the one-stop-shop B2B automation and payments offering – that is, AR coupled with AP – is expected to accelerate go-forward sales across all REPAY business lines
  • B2B Expertise
    • B2B automation and payment experts Darin Horrocks (cPayPlus CEO) and Seth Barnard (cPayPlus CTO) will join REPAY post-close, serving as leaders within the B2B business

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