Buckley Capital Advisors Criticizes Take-Private Proposal for Priority Technology Holdings
In a notable response to a recent financial move, Buckley Capital Advisors has publicly expressed its opposition to a take-private proposal put forth by Thomas C. Priore, who serves as the Chairman and CEO of Priority Technology Holdings, Inc. (PRTH). This proposal, which aims to acquire all outstanding shares not currently held by the investor group led by Priore, is framed as drastically undervaluing the company. Buckley Capital, owning about 2.2% of PRTH's shares, argues that the offer price of $6.00 to $6.15 per share does not adequately reflect the company's intrinsic value or its promising growth potential.
According to Buckley, while they understand Priore's frustrations regarding the company’s current share price performance—especially as it has been impacted by broader economic factors— they find the proposed price to be opportunistic. The firm believes that this undervaluation does not consider the company's robust business model and steady profitability. Buckley Capital insists that a fair assessment of PRTH's value would yield a much higher equity valuation, potentially between $15 to $20 per share, vastly exceeding the proposed range.
The crux of Buckley's argument rests on the sustainable profitability of PRTH, especially noting that over 90% of its business revenue is either recurring or reoccurring, ensuring a predictable revenue stream. The company’s adjusted EBITDA margin stands impressively at around 24%, highlighting its strong operational performance. With projected earnings per share of approximately $1.30 in 2026, Buckley contends that PRTH's shares should be trading at a multiple of 15 times their expected earnings, leading to a target price around $19.50 per share.
Delving into multiple valuation analyses, Buckley stresses the stark contrast between PRTH's current market valuation and its true intrinsic worth. Their analysis indicates that segments within PRTH—the SMB segment, B2B segment, and Enterprise segment—hold significant value, far surpassing what Priore's proposal would yield. For instance, the high-quality Enterprise segment, which boasts a high EBITDA margin, is essential to understanding PRTH's competitive positioning within the financial services sector.
Citing recent comparable transactions in the financial payments industry, all of which reflect higher valuation multiples than those proposed by Priore, Buckley presents a compelling case for the value discrepancy. Transactions involving competitors have illustrated that acquisition targets have been valued significantly higher, thereby affirming that Buckley’s view is consistent with market trends.
The firm's call to action for the Special Committee overseeing the proposal is clear and urgent. They advocate for the committee members to take independent steps to ensure that all strategic alternatives are robustly considered and reviewed. This process should be transparent, allowing for the input and protection of minority shareholders not represented in the investor group, ultimately aiming to maximize value for all associated stakeholders before any potential approval process of the proposal can commence.
Buckley Capital has expressed willingness to engage in constructive dialogue with the board on this critical matter, highlighting their commitment to ensuring the best possible outcome for all shareholders involved. They hold strong against accepting the existing proposal terms, emphasizing that the board's fiduciary duty is to act in the best interest of all stakeholders and not just the controlling shareholders. In conclusion, the proposal, per Buckley Capital Advisors, is not merely a financial transaction but a potential misappropriation of value that could set a concerning precedent for corporate governance and shareholder interests. Buckley advocates for vigilance and action to uphold the integrity and value of Priority Technology Holdings, ensuring equity for every shareholder in this pivotal moment.
According to Buckley, while they understand Priore's frustrations regarding the company’s current share price performance—especially as it has been impacted by broader economic factors— they find the proposed price to be opportunistic. The firm believes that this undervaluation does not consider the company's robust business model and steady profitability. Buckley Capital insists that a fair assessment of PRTH's value would yield a much higher equity valuation, potentially between $15 to $20 per share, vastly exceeding the proposed range.
The crux of Buckley's argument rests on the sustainable profitability of PRTH, especially noting that over 90% of its business revenue is either recurring or reoccurring, ensuring a predictable revenue stream. The company’s adjusted EBITDA margin stands impressively at around 24%, highlighting its strong operational performance. With projected earnings per share of approximately $1.30 in 2026, Buckley contends that PRTH's shares should be trading at a multiple of 15 times their expected earnings, leading to a target price around $19.50 per share.
Delving into multiple valuation analyses, Buckley stresses the stark contrast between PRTH's current market valuation and its true intrinsic worth. Their analysis indicates that segments within PRTH—the SMB segment, B2B segment, and Enterprise segment—hold significant value, far surpassing what Priore's proposal would yield. For instance, the high-quality Enterprise segment, which boasts a high EBITDA margin, is essential to understanding PRTH's competitive positioning within the financial services sector.
Citing recent comparable transactions in the financial payments industry, all of which reflect higher valuation multiples than those proposed by Priore, Buckley presents a compelling case for the value discrepancy. Transactions involving competitors have illustrated that acquisition targets have been valued significantly higher, thereby affirming that Buckley’s view is consistent with market trends.
The firm's call to action for the Special Committee overseeing the proposal is clear and urgent. They advocate for the committee members to take independent steps to ensure that all strategic alternatives are robustly considered and reviewed. This process should be transparent, allowing for the input and protection of minority shareholders not represented in the investor group, ultimately aiming to maximize value for all associated stakeholders before any potential approval process of the proposal can commence.
Buckley Capital has expressed willingness to engage in constructive dialogue with the board on this critical matter, highlighting their commitment to ensuring the best possible outcome for all shareholders involved. They hold strong against accepting the existing proposal terms, emphasizing that the board's fiduciary duty is to act in the best interest of all stakeholders and not just the controlling shareholders. In conclusion, the proposal, per Buckley Capital Advisors, is not merely a financial transaction but a potential misappropriation of value that could set a concerning precedent for corporate governance and shareholder interests. Buckley advocates for vigilance and action to uphold the integrity and value of Priority Technology Holdings, ensuring equity for every shareholder in this pivotal moment.
Topics Financial Services & Investing）
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