Priority Technology's Strategic Expansion and Financial Flexibility: A High-Conviction Buy in Fintech

In the ever-evolving fintech landscape, companies that master the art of capital allocation and strategic integration often outperform peers by widening margins and capturing market share. Priority Technology Holdings (NASDAQ: PRTH) has positioned itself as a prime example of this playbook, leveraging its recent acquisition of Boom Commerce and a $50 million residual financing facility to accelerate revenue growth and EBITDA margins. For investors seeking high-conviction, value-driven plays in the sector, the case for Priority is compelling.

Strategic Acquisition: Boom Commerce as a Catalyst

On August 18, 2025, Priority completed the acquisition of Boom Commerce—a payment processing platform with a robust B2B and enterprise client base—for a total consideration of $73.5 million in cash, $12.8 million in equity, and up to $17 million in earnouts tied to EBITDA performance over four years. This tuck-in acquisition aligns with Priority's broader vision of building a “unified commerce” ecosystem that integrates payments, banking, and treasury solutions.

The strategic rationale is clear: Boom Commerce's portfolio complements Priority's existing infrastructure, enabling cross-selling opportunities and operational synergies. For instance, Boom's expertise in high-margin B2B transactions—where Priority already saw 22% year-over-year revenue growth in Q1 2025—creates a flywheel effect. By consolidating payment processing capabilities, Priority can reduce client acquisition costs and deepen relationships with enterprise clients, who increasingly demand integrated financial solutions.

Financial Flexibility: A $50M Facility as a Growth Engine

The acquisition was financed in part by a $50 million senior secured credit facility, with an accordion feature allowing expansion to $125 million. This structure provides Priority with immediate liquidity while preserving flexibility to fund future deals or weather macroeconomic volatility. Crucially, the company's broader $1.1 billion refinancing in mid-2025—featuring a 7-year term loan and 5-year revolver—reduced interest rates by 100 basis points and extended maturities to 2032.

This financial discipline is critical. By extending debt maturities and lowering costs, Priority has freed up cash flow to reinvest in growth. The company's Q2 2025 results underscore this: adjusted EBITDA rose 8.7% year-over-year to $56 million, while revenue hit $239.8 million, exceeding guidance. With a debt-to-EBITDA ratio now below 3.5x (a level that supports investment-grade credit metrics), Priority is well-positioned to fund further acquisitions without overleveraging.

Synergies and Margin Expansion

The Boom Commerce deal is not just about scale—it's about margin accretion. By integrating Boom's payment processing assets into its unified commerce platform, Priority can reduce redundancies in back-office operations and leverage its existing infrastructure to serve new clients. For example, Boom's enterprise clients can now access Priority's treasury management tools, while Priority's existing clients gain access to Boom's specialized B2B payment solutions.

Moreover, the earnout structure—tying $17 million in payments to EBITDA performance—aligns incentives between Priority and sellers. This performance-based approach mitigates overpayment risks and ensures that the acquisition's value is tied to tangible outcomes. If Boom's EBITDA meets targets, Priority's margins could expand by 50-70 basis points annually, assuming no incremental capital expenditure.

Investment Thesis: A Near-Term Buy

For investors, the combination of strategic execution and financial prudence makes Priority a standout in the fintech sector. The company's stock currently trades at a forward P/E of 12x, below its five-year average of 14x, and offers a compelling risk-reward profile. With $40 million in share repurchase authorization and a balance sheet that supports further tuck-in acquisitions, Priority is primed to deliver value through both organic growth and disciplined M&A.

Key risks include integration challenges with Boom Commerce and potential regulatory headwinds in the payments sector. However, Priority's track record—successful integrations of RadPad and Landlord Station in 2018, and its Plastiq acquisition in 2023—suggests a mature approach to post-deal execution.

Conclusion

Priority Technology's acquisition of Boom Commerce and its $50 million financing facility exemplify the company's ability to execute high-impact, capital-efficient growth. By expanding its payment processing capabilities, optimizing its capital structure, and targeting high-margin B2B markets, Priority is building a durable competitive moat. For investors seeking a value-driven play in fintech, the stock offers a rare combination of near-term catalysts and long-term potential.