Paya Inc is nearing a deal to merge with blank-check acquisition company FinTech Acquisition Corp III (FTAC.O) which could value the U.S. payments solutions provider at around $1.3 billion, including debt, according to people familiar with the matter.
A deal for Paya, which is owned by private-equity firm GTCR, could be announced as early as next week, the sources said, cautioning that talks could still fall apart at the last minute and requesting anonymity because the negotiations are private.
FinTech Acquisition III, GTCR and Paya declined to comment.
Special-purpose acquisition companies (SPACs) are shell companies that raise money in an initial public offering (IPO) to pursue an acquisition at a later date, with the acquired company then going public as a result of the deal.
SPAC mergers have emerged as a popular route for companies to go public during the COVID-19 pandemic. These deals can assign firm valuations to companies that feel uncertain over how their IPO would perform.
Many SPACs have been emboldened by the strong performance of some of these deals, such as sports betting company DraftKings Inc DKNG.O and electric vehicle maker Nikola Corporation NKLA.O.
A stock market listing by Paya would come after a string of payments companies have gone public in the last 12 months, with the likes of Shift4 Payments FOUR.N and Repay Holdings (RPAY.O) performing well since listing their shares.
FinTech Acquisition III is the third blank-check firm founded by seasoned investor Daniel Cohen. It raised $345 million in its November 2018 IPO.
Atlanta, Georgia-based Paya, previously the U.S. payment arm of Britain’s Sage Group, was valued at $260 million when GTCR acquired it in June 2017.
Paya now serves more than 100,000 customers, mostly small and medium-sized enterprises across the United States and Canada.
A deal for Paya would be the second divestment in financial services by GTCR in recent days, following a deal by Black Knight Inc (BKI.N) on Monday to buy its mortgage data firm Optimal Blue for $1.8 billion.