Repay (NASDAQ:RPAY) announced it has reached a definitive agreement to acquire KUBRA for $372 million in an all-cash transaction, a deal the company said will accelerate its push to become a scaled digital bill payment provider across North America.
Deal rationale: building an end-to-end bill payment platform
Chief Executive Officer and co-founder John Morris said the combination brings together Repay’s payment processing capabilities in consumer finance with KUBRA’s billing and consumer communication platform focused on utilities, government, and insurance. “Together, we will offer a comprehensive end-to-end platform spanning bill presentment, communication services, a best-in-class clearing and settlement engine, and payment processing,” Morris said.
Morris also highlighted KUBRA’s client base and market reach, saying Repay expects to “interact with over 40% of U.S. and Canadian households every month.” During the Q&A, Morris characterized KUBRA’s customers as “large enterprise billers,” concentrated primarily in utilities and government, and said many clients have been customers “for years,” while also noting the utility and government markets are “a heavy RFP business.”
Leadership and integration plans
Following the close, KUBRA will continue to be led by its current CEO, Rick Watkin, who will report to Morris. Morris called Watkin an “industry veteran” with decades of experience in KUBRA and the utility vertical, adding that the two executives have known each other through prior discussions about strategic combination opportunities.
Financing, timing, and leverage targets
Chief Financial Officer Robert Houser said the $372 million purchase price will be financed using a combination of cash on the balance sheet and a $500 million term loan to be issued between signing and closing. Houser said the company has obtained committed financing and intends to replace its existing revolving credit facility as part of the transaction, which he said will provide “ample liquidity and financial flexibility.”
Repay expects net leverage to be about 4x at closing, including transaction-related adjustments and synergies, according to Houser. He said deleveraging is a priority, and the company expects to reduce net leverage to below 3x “within 18 months of closing,” supported by what management described as a strong, predictable free cash flow profile.
The acquisition is expected to close in the second quarter of 2026, subject to regulatory approvals in both the U.S. and Canada.
Combined financial profile and synergy expectations
Management provided combined 2025 metrics for the businesses of approximately $548 million in revenue and about $178 million in adjusted EBITDA. Morris said annual payment volumes would exceed $130 billion, though he added the company does not plan to report volume quarterly and noted the figure includes payment types such as ACH volume that Repay does not currently disclose separately.
Houser said Repay expects to achieve about $15 million of annual run-rate expense synergies by 2028, primarily from streamlining operations, integrating technology platforms, and aligning corporate structure. The company also expects “platform consolidation and CapEx savings of $5 million plus by 2028,” and said capital expenditures are expected to fall below 10% of revenue after infrastructure integration and optimization.
Both Morris and Houser said the deal is expected to be about 25% accretive to free cash flow in 2028. Asked about KUBRA’s free cash flow characteristics, Houser said its free cash flow profile, including synergies, is “in line” with Repay’s and should support the company’s deleveraging goals.
On profitability, Morris said the combined company expects adjusted EBITDA margins in the “low-to-mid 30s%” range. Houser added that KUBRA’s focus on large enterprise clients carries a “little bit lower margin profile,” but includes “long-standing, recurring, non-discretionary volume.”
Customer reach, product mix, and growth assumptions
Executives pointed to cross-selling opportunities across the combined client base. Houser said Repay plans to expand payment capabilities with KUBRA clients to drive digital payment adoption and retention, and to roll out KUBRA’s communication services into Repay’s consumer finance verticals. In response to a question about potentially selling assets to speed deleveraging, Houser said management remains “very excited” about Repay’s existing businesses and sees cross-sell potential, indicating no current plans to divest.
On payment method mix, Morris said utility bill payments tend to skew toward ACH, while Houser added there is “also a sizable credit profile,” including credit card payments in the utility space. Morris also provided a forward-looking revenue mix description, saying consumer payments would be about 45%, KUBRA about 45%, and business payments about 10% post-combination.
Regarding growth expectations, Houser advised that for modeling purposes investors should use “where the industry is in the mid-single digit range,” and said the company would provide more detail and guidance after the transaction closes.
In closing remarks, Morris said the acquisition is intended to strengthen Repay’s ability to offer a “comprehensive end-to-end digital platform,” and said he expects to provide updates on progress “throughout 2026 and beyond.”
About Repay (NASDAQ:RPAY)
Repay Holdings Corp. (Nasdaq: RPAY) is a specialized financial technology company that delivers integrated payment solutions to businesses operating within key vertical markets. The company’s platform enables merchants and service providers to accept a range of payment types, including credit and debit cards, automated clearing house (ACH) transfers and electronic checks. Repay’s offerings are designed to seamlessly integrate with third-party software applications, such as enterprise resource planning, customer relationship management and point-of-sale systems, empowering industries such as utilities, telecommunications, automotive finance, healthcare, insurance, property management and education.
Tracing its roots to the formation of Pinnacle Payment Systems in 1997, Repay expanded its capabilities through strategic acquisitions, including Southeastern Integrated Solutions and Payliance, before completing a business combination with Thunder Bridge Acquisition II in 2019 to become a publicly traded company on the Nasdaq.
