Item 1.01.
Entry into a Material Definitive Agreement.
On January 9, 2023, Paya Holdings Inc. (the “Company”)
announced the execution of an Agreement and Plan of Merger (the “Merger Agreement”) with Nuvei Corporation,
a corporation incorporated pursuant to the laws of Canada (“Parent”), and Pinnacle Merger Sub, Inc., a Delaware
corporation and wholly owned subsidiary of Parent (“Merger Sub”).
Pursuant to the Merger Agreement, and upon the terms
and subject to the conditions thereof, Merger Sub has agreed to commence a tender offer (the “Offer”), to purchase
all of the shares of common stock, par value $0.001 per share, of the Company issued and outstanding (the “Shares”)
at a price of $9.75 per Share (the “Offer Price”), in cash, without interest thereon (but subject to applicable
withholding).
The Offer will initially remain open for a minimum
of 20 business days from the date of commencement of the Offer. If at the scheduled expiration time of the Offer any condition to the
Offer (other than the Minimum Condition, the Termination Condition (each, as defined below) and any conditions that by their nature are
to be satisfied at the expiration of the Offer, irrespective of if such conditions are satisfied) has not been satisfied and has not been
waived by Parent or Merger Sub (to the extent permitted by the Merger Agreement), Merger Sub will, and Parent will cause Merger Sub to,
extend the Offer in accordance with the terms of the Merger Agreement to permit the satisfaction of all Offer conditions. The obligation
of Merger Sub to consummate the Offer is subject to the satisfaction or waiver of customary conditions, including, among others, (i) there
being validly tendered and not validly withdrawn prior to the expiration of the Offer a number of Shares that, considered together with
all other Shares (if any) beneficially owned by Parent and its affiliates, represent at least one more Share than 50% of the total number
of Shares outstanding at the time of the expiration of the Offer (the “Minimum Condition”), (ii) any waiting
period applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or otherwise
been terminated, (iii) the absence of any law or order by any governmental authority of competent jurisdiction prohibiting, restricting,
enjoining or otherwise making illegal the consummation of the Offer or the Merger, (iv) the Merger Agreement not having been terminated
in accordance with its terms (the “Termination Condition”) and (v) other customary conditions set forth in Annex
I to the Merger Agreement. The Minimum Condition and the Termination Condition may not be waived by Parent or Merger Sub without the prior
written consent of the Company.
Following the consummation of the Offer, subject
to the terms and conditions of the Merger Agreement and in accordance with Section 251(h) of the General Corporation Law of the State
of Delaware (the “DGCL”), Merger Sub will be merged with and into the Company (the “Merger”),
with the Company surviving the Merger as a wholly owned subsidiary of Parent in accordance with the DGCL. At the effective time of the
Merger (the “Effective Time”), each Share that is not (a) validly tendered and irrevocably accepted for purchase
pursuant to the Offer, (b) held by a stockholder who is entitled to demand appraisal and who has properly and validly exercised appraisal
rights in accordance with, and who has complied with, applicable law, or (c) held by Parent, Merger Sub, or any other direct or indirect
wholly owned subsidiary of Parent, will be thereupon converted into the right to receive cash in an amount equal to the Offer Price, on
the terms and subject to the conditions set forth in the Merger Agreement.
The portion of each of the Company’s stock
options (the “Options”) that is outstanding and vested as of immediately prior to the Effective Time and that
has an exercise price less than the Offer Price will be cancelled and converted into the right to receive a lump sum cash payment, without
interest, in an amount equal to the product of (i) the total number of Shares subject to such vested Option, multiplied by
(ii) the excess of (a) the Offer Price over (b) the exercise price per Share under such Option. The portion of each Option
that is outstanding and unvested as of immediately prior to the Effective Time and that has an exercise price less than the Offer Price
will be converted into an option (a “Parent Option”) to purchase a number of subordinate voting shares of Parent
(“Parent Shares”) equal to the product (rounded down to the nearest share) of (x) the number of Shares subject
to such unvested Option multiplied by (y) the exchange ratio (which is based on the ratio of the Offer Price to the trading price
of Parent Shares), with an exercise price per Parent Share (rounded up to the nearest cent) equal to the per Share exercise price under
the unvested Option prior to the Effective Time divided by the exchange ratio. Each Parent Option will be subject to terms and
conditions (including the same vesting and exercisability terms) that are no less favorable than those that applied to the unvested Option
immediately prior to the Effective Time. Each Option, whether vested or unvested, that has an exercise price per Share that is equal to
or greater than the Offer Price will be canceled for no consideration.
The portion of each of the Company’s restricted
stock unit awards (the “RSUs”) that is outstanding and vested as of immediately prior to the Effective Time
(including any RSUs held by a non-employee director of the Company that vest pursuant to their terms), will be cancelled and converted
into the right to receive a lump sum cash payment, without interest, in an amount equal to (i) the total number of Shares issuable
in settlement of such vested RSUs as of immediately prior to the Effective Time multiplied by (ii) the Offer Price
(plus the value of any accrued but unpaid dividend equivalent rights relating to such vested RSUs). Any RSUs that are outstanding and
unvested as of immediately prior to the Effective Time will be converted into a restricted stock unit award (the “Parent RSUs”)
with respect to a number of Parent Shares equal to the product of (x) the number of Shares underlying such unvested RSUs as of immediately
prior to the Effective Time multiplied by (y) the exchange ratio. The Parent RSUs will be subject to terms and conditions (including
the same vesting terms) that are no less favorable than those that applied to the unvested RSUs immediately prior to the Effective Time.
The Merger Agreement includes representations, warranties
and covenants of the Company, Parent and Merger Sub customary for a transaction of this nature. The Company will also use reasonable best
efforts to conduct its business in all material respects in accordance with applicable law and in all material respects in the ordinary
course of business prior to the Effective Time.
The Company has agreed to customary “no-shop”
restrictions on its ability to solicit alternative acquisition proposals from third parties and engage in discussions or negotiations
with third parties regarding alternative acquisition proposals. Notwithstanding these restrictions, the Company may, under certain circumstances,
provide information to and participate in discussions or negotiations with third parties with respect to a bona fide written alternative
acquisition proposal that the board of directors of the Company has determined in good faith (after consultation with its financial advisors
(in the case of financial matters) and outside legal counsel) constitutes or would reasonably be expected to result in a Superior Proposal
(as defined in the Merger Agreement), if failing to do so would be inconsistent with the board’s fiduciary duties under applicable
law.
The Merger Agreement also includes customary termination
provisions for both the Company and Parent, and provides that, in connection with the termination of the Merger Agreement under specified
circumstances, including termination by the Company to accept and enter into an agreement with respect to a Superior Proposal, the Company
will pay Parent a termination fee of approximately $38 million. The parties to the Merger Agreement are also entitled to specifically
enforce the terms and provisions of the Merger Agreement.
The foregoing description of the Merger Agreement
and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference. The Merger Agreement has been filed to
provide information to investors regarding its terms. The Merger Agreement is not intended to provide any other factual information about
the Company, Parent or Merger Sub, their respective businesses, or the actual conduct of their respective businesses during the period
prior to the consummation of the Offer, the Merger or the other transactions contemplated therein. The Merger Agreement and this summary
should not be relied upon as disclosure about the Company or Parent. None of the Company’s stockholders or any other third parties
should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts
or conditions of the Company, Parent, Merger Sub or any of their respective subsidiaries or affiliates. The Merger Agreement contains
representations and warranties that are the product of negotiations among the parties thereto and that the parties made to, and solely
for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications
and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered
by the Company to Parent and Merger Sub in connection with the Merger Agreement. The representations and warranties may have been made
for the purpose of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts
and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to stockholders
or investors. Accordingly, investors should consider the information in the Merger Agreement in conjunction with the entirety of the factual
disclosure about the Company in the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”).
Information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in the Company’s public disclosures.
Tender and Support Agreement
On January 8, 2023, in connection with the execution
and delivery of the Merger Agreement, GTCR-Ultra Holdings, LLC (“Ultra Holdings”), solely in its capacity as
a stockholder of the Company, entered into a tender and support agreement (the “Tender and Support Agreement”)
with Parent and the Company, pursuant to which Ultra Holdings agreed, among other things, (i) to tender all of the Shares held by Ultra
Holdings in the Offer, subject to certain exceptions (including the valid termination of the Merger Agreement), (ii) to vote against other
proposals to acquire the Company and in favor of the adoption of the Merger Agreement and (iii) to certain other restrictions on its ability
to take actions with respect to the Company and its Shares. Ultra Holdings beneficially owns approximately 34% of the outstanding Shares
as of January 8, 2023.
The foregoing description of the Tender and Support
Agreement does not purport to be complete and is qualified in all respects by reference to the Tender and Support Agreement, which is
attached as Exhibit 10.1 hereto and incorporated by reference herein.