v3.26.1
Acquisitions
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Acquisitions that occurred in prior years
Payslate
On January 21, 2025, Priority’s wholly owned subsidiary, Priority Canada Acquisition Company, Inc., acquired 100% of the equity interest in Payslate Inc. (Canada), and its subsidiary Rentmoola Payment Solutions Ltd (United Kingdom) (jointly referred as "Letus business"). The Letus business is engaged in processing of rent payments for property management companies in the United States and Canada. The acquisition will provide synergy opportunities to the Company's Treasury Solutions rent payment business and expand Priority's services in Canada. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. The total purchase consideration was $8.8 million, consisting of $4.4 million in cash consideration funded by the Company’s cash flows, deferred consideration of $4.3 million and contingent consideration of $0.1 million.
The deferred consideration of $4.3 million was recorded at the fair value on the acquisition date. The deferred consideration will be paid monthly equal to 40% of gross profit under the agreement and total payments will not exceed $6.5 million. Any amount remaining but unpaid will be paid in full by January 21, 2030. The Company will accrete interest expense on the deferred consideration throughout the period.
The final purchase price allocation is set forth in the table below:
(in thousands)
Consideration:
Cash(1)
$4,627 
Deferred consideration (2)
4,282 
Contingent consideration(3)
104 
Less: cash acquired(175)
Total purchase consideration, net of cash acquired$8,838 
Recognized amounts of assets acquired and liabilities assumed(4):
Accounts receivable$149 
Prepaid expenses229 
Property, equipment and software8 
Goodwill6,070 
Intangible assets:
Customer relationships1,555 
Trademarks480 
Technology706 
Accounts payable and accrued expenses(359)
Total purchase consideration$8,838 
(1)Cash at closing net of adjustments from estimated net working capital to actual working capital.
(2)The fair value of the deferred consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the deferred consideration payments
and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the deferred consideration payments over all iterations of the simulation.
(3)The contingent consideration represents the fair value of the share of net operating loss carryforwards owed to the seller in the future.
(4)Includes deferred tax asset of $3.8 million which has a full valuation allowance.
Goodwill of $6.1 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. There was no goodwill deductible for income tax purposes. The goodwill was 100% allocated to the Company's Treasury Solutions reportable segment.
Sila
On August 26, 2025, Priority's wholly owned subsidiary, Priority Tech Ventures, LLC, through it's merger subsidiary, acquired total outstanding shares including all voting interests in Sila Inc. ("the "Sila business" or "Sila"). Sila is a payment platform that enables ACH transfers, instant settlement, digital wallets and built-in compliance through a simple application programming interface. Technology acquired in this transaction will supplement Priority's current treasury solutions. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. The total purchase consideration was $7.2 million, consisting of $3.4 million in cash consideration funded by the Company's cash flows, and contingent consideration of $3.8 million for contractual earn-outs and additional contingent consideration. Earn-outs will be paid as a percentage of gross profit when certain thresholds are met and additional contingent considerations will be paid based on utilization of the seller's carryforward tax losses. The purchase price is considered preliminary pending finalization of customary adjustments from timing differences.
The contingent consideration for the contractual earn-outs was recorded at the fair value of $3.9 million on the acquisition date. The contingent consideration will be paid quarterly subject to terms and conditions noted within the agreement over a period of seven years and total payments will not exceed $17.0 million.
The preliminary purchase price allocation is set forth in the table below:
(in thousands)
Consideration:
Cash(1)(4)
$3,449 
Contingent consideration (2)(4)
3,881 
Less: cash acquired(100)
Total purchase consideration, net of cash acquired$7,230 
Recognized amounts of assets acquired and liabilities assumed:
Accounts receivable(4)
$68 
Prepaid expenses(4)
346 
Other noncurrent assets(3)(4)
9,522 
Intangible assets:
Trademarks(4)
772 
Technology(4)
943
Accounts payable and accrued expenses(4)
(386)
Customer deposits(46)
Fair value of net assets acquired$11,219 
Estimated bargain purchase gain(4)
$3,989 
(1)Cash at closing net of adjustments from estimated net working capital and closing cash.
(2)The fair value of the contingent consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the contingent consideration
payments and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation. The contingent consideration represents the fair value of the contractual earn-outs and the share of net operating loss carryforwards owed to the seller in the future.
(3)Includes a deferred tax asset of $9.5 million.
(4)During the fourth quarter of 2025, the Company recorded measurement period adjustments due to additional      information received that existed on the acquisition date.
The fair value of acquired assets and assumed liabilities exceeded the consideration paid, resulting in a bargain purchase gain. The Company reviewed its acquisition accounting methods, confirmed all assets and liabilities were properly identified, and ensured measurements reflected all consideration as of the closing date. The gain was primarily due to recognizing a deferred tax asset recorded in accordance with ASC 740 related to Sila's historical net operating losses. The bargain purchase gain is recorded in other income, net, in the Unaudited Consolidated Statements of Operations and Comprehensive Income.
DMS
On October 1, 2025, Priority's subsidiary, Priority DMS, LLC, entered into the asset purchase and contribution agreement with DMSJV, LLC ("DMS"), to acquire substantially all of the assets of DMS, including all voting interests. DMS provides credit card processing solutions to automotive dealerships via marketing and selling card and ACH processing services and ancillary services including POS systems, payment gateways, payment processing and authorization, clearing, and settlement for credit card, debit and ACH transactions, which will supplement the Company's Merchant Solutions reportable segment. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. The total purchase consideration was $57.9 million, consisting of $31.5 million in cash consideration funded by the Company's term loan facility, deferred consideration of $2.8 million, contingent consideration of $17.1 million for contractual earn-outs and $6.6 million in non-voting subsidiary shares issued to the sellers. Earn-outs will be paid as a percentage of gross profit when certain thresholds are met. The purchase price is considered preliminary pending finalization of customary adjustments from timing differences.
The contingent consideration for the contractual earn-outs was recorded at the fair value of $17.1 million on the acquisition date. The contingent consideration will be paid when an initial cumulative threshold for gross profit is met, subject to terms and conditions noted within the agreement, over a period of at least four years and total payments will not exceed $22.5 million.
The preliminary purchase price allocation is set forth in the table below:
(in thousands)
Consideration:
Cash$31,500 
Contingent consideration(2)
17,066 
Common equity of the Acquiring Entity(3)
6,562 
Deferred consideration(1)
2,801 
Total purchase consideration, net of cash acquired$57,929 
Recognized amounts of assets acquired and liabilities assumed:
Accounts receivable$11 
Inventory145 
Other noncurrent assets7 
Goodwill34,159 
Intangible assets:
Customer relationships17,187 
Trademarks3,222 
Technology3,277 
Accounts payable and accrued expenses(79)
Total purchase consideration$57,929 
(1)The deferred consideration represents the fair value of the amount to be remitted upon direction of the seller no later than four years from the acquisition date.
(2)The fair value of the contingent consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the deferred consideration payments and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation.
(3)The fair value determination for the Class B units utilized an option pricing model. The seller may request to convert 50% of the Class B Units to shares in the Company no later than five years from the acquisition date.
Goodwill of $34.2 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. There was no goodwill deductible for income tax purposes. The goodwill was 100% allocated to the Company's Merchant Solutions reportable segment.
Other Acquisitions
Boom Commerce
On August 18, 2025, Priority Boom, LLC, a subsidiary of Priority, completed its acquisition of certain residual portfolio rights for a purchase price of $73.5 million in cash, $13.5 million in Common shares of Priority and earn-out payments not to exceed $17.0 million based on meeting certain thresholds over a three-year period from the date of acquisition. The transaction did not meet the definition of a business; therefore, it was accounted for as an asset purchase under which the cost of the acquisition was allocated to the acquired assets based on relative fair values. As an asset purchase, additional purchase price (in the form of earn-outs) is accounted for when payment to the seller becomes payable and is added to the carrying value of the asset, as long as it does not meet the definition of a derivative.