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Repay Holdings plans $260 million convertible notes offer

EditorBrando Bricchi
Published 07/02/2024, 04:17 PM
RPAY
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ATLANTA - Repay Holdings (NASDAQ:RPAY) Corporation (NASDAQ: RPAY), a payment processing solutions provider, announced its intention to offer $260 million in convertible senior notes due in 2029, subject to market and other conditions. The company also plans to give initial purchasers an option to buy an additional $27.5 million of these notes within a 13-day period starting from the issue date.

The proceeds from the offering are earmarked for various financial maneuvers, including paying for capped call transactions, repurchasing a portion of the company's outstanding 2026 convertible senior notes, and acquiring shares of its Class A common stock. Remaining funds will serve general corporate purposes.

Capped call transactions are intended to minimize potential dilution from the conversion of notes or to offset cash payments required upon conversion. These transactions may affect the market price of Repay's common stock and the convertible notes, potentially influencing the conversion rate and value received by note holders.

Alongside the offering, Repay expects to negotiate separate repurchases of its 2026 notes with individual holders, the terms of which will depend on the market price of the common stock and the trading price of the 2026 notes at the time of repurchase.

The convertible notes will be senior unsecured obligations, accruing interest semi-annually and maturing on July 15, 2029, unless repurchased, redeemed, or converted earlier. The notes will be convertible under specific conditions and during certain periods before April 15, 2029, and at any time thereafter until two days before the maturity date.

Repay may not redeem the notes before July 20, 2027, but has the option to redeem all or part of them for cash after this date, subject to certain conditions.

The convertible notes and any common stock issued upon conversion will not be registered under the Securities Act of 1933 and will be offered only to qualified institutional buyers.

This press release contains forward-looking statements that involve inherent risks and uncertainties. Repay cautions that actual results could differ materially from those anticipated in these forward-looking statements.

The information is based on a press release statement from Repay Holdings Corporation.

In other recent news, Repay Holdings Corporation reported a robust first quarter in 2024, with a 10% increase in organic revenue and an 11% rise in organic gross profit. The company also saw a remarkable 90% jump in free cash flow growth year-over-year. Additionally, adjusted EBITDA experienced a growth of approximately 15%.

Repay's strategic initiatives such as market efficiency, client implementations, and product focus have contributed to this strong performance, with the instant funding product witnessing significant growth. The company, with a healthy balance sheet, is focusing on organic growth and strategic M&A investments.

Recent developments indicate that Repay anticipates a positive financial outlook for 2024, with expected revenue between $314 million and $320 million and adjusted EBITDA between $139 million and $142 million. On the growth front, the company is eyeing opportunities in consumer and business payments, with new clients and expanded software partnerships. The company's executives have also expressed interest in potential acquisitions, particularly in the AP vertical within Business Payments.

InvestingPro Insights

As Repay Holdings Corporation (NASDAQ: RPAY) navigates the financial markets with its recent announcement of a convertible senior notes offering, investors and analysts are keeping a close eye on the company's performance metrics and future prospects. According to InvestingPro data, RPAY currently holds a market capitalization of approximately $994.81 million, reflecting the market's valuation of the company.

The company's revenue growth has shown positive signs, with a 5.8% increase over the last twelve months as of Q1 2024, and an even more impressive quarterly revenue growth of 8.3% in Q1 2024. This indicates a growing business that is expanding its top-line figures. Additionally, RPAY's gross profit margin stands at a robust 76.58%, suggesting that the company is maintaining a strong grip on its operational efficiency.

Amidst these financial maneuvers, InvestingPro Tips shed light on key aspects of RPay's financial health and future outlook. While RPAY is not currently profitable, with a negative P/E ratio of -10.39, analysts are optimistic about the company's potential to turn a profit this year. This optimism is further supported by the company's solid liquidity position, where liquid assets surpass short-term obligations, providing a cushion for near-term financial commitments.

However, investors should take note that four analysts have recently revised their earnings estimates downwards for the upcoming period, which could indicate potential headwinds or a more conservative outlook on the company's earnings potential. Moreover, RPAY does not offer a dividend, which may influence investment decisions for those seeking regular income streams.

For those looking to delve deeper into RPAY's financials and future projections, InvestingPro offers additional insights. There are currently more tips available on InvestingPro that could provide a more comprehensive view of the company's prospects. To gain access to these valuable tips, readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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