Priority Technology's Strategic Expansion: Leveraging Boom Commerce and $50M Credit Facility to Drive EBITDA and Revenue Growth

The Banking-as-a-Service (BaaS) sector is undergoing a seismic shift as fintech innovators redefine how businesses access financial tools. At the forefront of this transformation is Priority Technology Holdings, Inc. (NASDAQ: PRTH), a company that has positioned itself as a capital-efficient growth engine in a market projected to expand at a 16% annual rate. With a $50 million delayed draw term loan facility and the strategic acquisition of Boom Commerce, Priority is not only accelerating its market leadership but also demonstrating how disciplined capital allocation can drive scalable EBITDA growth in a competitive landscape.

Capital Efficiency Through Structured Financing

Priority's $50 million credit facility, structured as a securitization-style loan, is a masterstroke in optimizing capital. Unlike traditional debt, this facility allows the company to finance eligible residual and loan receivables generated by its ISO (Independent Sales Organization) and ISV (Independent Software Vendor) reseller network. By converting these receivables into liquidity, Priority reduces its reliance on third-party residuals—costly intermediaries that erode margins—and reinvests the proceeds into high-growth opportunities.

The facility's flexibility is further amplified by its alignment with Priority's core business model. For every dollar deployed, the company gains the ability to scale its reseller ecosystem, which historically has been a critical driver of revenue. Tim O'Leary, CFO, notes that this structure “enables us to accelerate growth while maintaining a lean balance sheet.” The result? A projected $6 million adjusted EBITDA benefit in 2025, achieved without significant incremental capital expenditure.

Strategic Acquisition of Boom Commerce: A Catalyst for Revenue and EBITDA

The acquisition of Boom Commerce, a reseller partner with deep enterprise customer relationships, underscores Priority's focus on capital-efficient scale. By acquiring Boom's revenue agreements and customer base, Priority added $5 million in incremental revenue for 2025 while reducing cost of sales by $6 million through lower third-party residuals. This acquisition is not just a revenue boost—it's a strategic integration of talent and relationships. Boom's leadership team, including CEO Sabin Burrell and COO John Hynes, now bolster Priority's direct sales channel, enhancing its ability to target high-value B2B clients.

The synergy between the credit facility and the Boom acquisition is evident. The $50 million loan provides the liquidity needed to fund the integration of Boom's assets while simultaneously enabling Priority to expand its reseller network. This dual-purpose capital deployment exemplifies how fintechs can leverage structured financing to achieve both scale and profitability.

Market Leadership in the BaaS Sector

Priority's market position as the fifth-largest non-bank merchant acquirer in the U.S. is underpinned by its ability to offer customizable, scalable solutions to SMBs and enterprises alike. Its partnerships with financial giants like Citibank, Visa, and Mastercard further solidify its role as a critical infrastructure provider in the digital payments ecosystem. With a 4.94% return on assets and a levered free cash flow of $36.8 million in the trailing twelve months, Priority's financial discipline is a stark contrast to the capital-intensive strategies of many peers.

The company's beta of 1.51 reflects its growth-oriented profile, but its debt reduction efforts—such as redeeming preferred stock—signal a commitment to balancing risk and reward. As the BaaS market matures, Priority's focus on operational efficiency and strategic debt management positions it to outperform competitors reliant on high-cost capital.

Investment Implications

For investors, Priority's strategic moves present a compelling case. The combination of a securitization-style credit facility, a high-margin acquisition, and a robust BaaS platform creates a flywheel effect: capital is deployed to generate liquidity, which fuels further growth. With a market capitalization of $630.552 million and a projected 16% revenue growth in 2024, the stock offers exposure to a fintech with both scalability and profitability.

However, risks remain. The company's $800 million debt load, though being actively managed, could weigh on margins if interest rates rise. Additionally, the BaaS sector is highly competitive, with new entrants and legacy banks vying for market share. That said, Priority's ability to innovate—such as its securitization model—provides a moat that few can replicate.

Conclusion

Priority Technology's strategic expansion is a textbook example of capital-efficient growth in the BaaS sector. By leveraging a $50 million credit facility and the Boom Commerce acquisition, the company is not only driving EBITDA and revenue growth but also reinforcing its market leadership. For investors seeking exposure to a fintech with a clear path to profitability and scale, PRTH represents a high-conviction opportunity—provided they remain mindful of the sector's inherent risks. As the digital payments landscape evolves, Priority's ability to balance innovation with financial discipline may well define its trajectory in the years ahead.