Fiserv Stock In Spotlight After Affiliate Set To Buy Payfare For Significant Premium: Retail Cheers The Deal

Fiserv, Inc. (FI) shares were in the spotlight early on Monday after the payments and financial services technology firm announced its intent to acquire Payfare Inc, an earned wage access company that powers instant access to earnings and digital banking solutions for workforces.

Fiserv said Payfare’s offerings, combined with the firm’s strengths in processing, bank ledgers and integrated value-added services, enhance the company’s solution in embedded banking, payments and lending and help meet needs of large enterprises and financial institutions.

Under agreement terms, an affiliate of Fiserv will acquire all of the issued and outstanding common shares of Payfare for C$4 (US$2.77) in cash per share for a total consideration of approximately C$201.5 million (US$139.71).

The purchase price represents a premium of approximately 90% to the closing price of Payfare’s stock on the Toronto Stock Exchange on Dec. 20, 2024, the last trading day prior to the announcement of the transaction. The deal is expected to close in the first half of 2025.

Payfare CEO Marco Margiotta believes joining Fiserv is a “tremendous” opportunity for the company.

"Our board conducted a thorough strategic review process together with our financial advisors, having evaluated numerous acquisition, commercial partnership, and other opportunities, and concluded that the Transaction is in the best interests of the company, its various stakeholders and its shareholders with certainty of value with an all-cash offer," Margiotta said.

Payfare’s board has unanimously recommended that shareholders of the company vote in favor of the transaction.

Following the announcement, retail sentiment on Stocktwits climbed into the ‘bullish’ territory (57/100) compared to the ‘neutral’ zone seen a month ago.

Fiserv’s shares have gained over 54% since the beginning of the year.

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Exchange Rate: 1 CAD = 0.69 USD