Priority Technology Holdings to Acquire Finxera Creating Payments and BaaS Platform
On March 8, 2021, Priority Technology Holdings announced a definitive agreement to acquire Finxera Holdings, a fintech pioneer in Banking-as-a-Service platforms. Finxera will operate as a wholly owned subsidiary of Priority, with the transaction expected to close in Q3 2021. The combined platform targets pro forma 2021 revenue of approximately $540 million, Adjusted EBITDA of roughly $130 million, free cash flow of about $60 million, and net leverage below 4.25x.
Financing includes up to $250 million in preferred equity from Ares Management affiliates, plus $300 million in total equity from Ares and Finxera shareholders, which also refinances Priority's existing debt. Strategically, the deal combines Priority's payments technology — including merchant services, payment facilitation, and card issuing — with Finxera's BaaS capabilities for rapid banking integration, virtual banking, e-wallets, and enhanced risk and compliance services. Finxera's BaaS role positions it as a sponsor bank enabler within fintech ecosystems, significantly expanding Priority's addressable market.
- Demonstrates growing M&A appetite for BaaS platforms as payments companies seek to embed banking capabilities
- Combined payments and BaaS offering creates a more vertically integrated competitor in the sponsor bank enablement space
- Ares Management's significant financing commitment signals institutional investor confidence in BaaS business models