REPAY Defends KUBRA Deal Amid Fierce Activist Investor Pressure

ATLANTA, GA – April 13, 2026

Payment processing firm Repay Holdings Corporation (NASDAQ: RPAY) is facing a significant challenge from an activist investor over its largest acquisition to date, forcing the company to publicly defend its strategic direction. REPAY issued a formal statement reaffirming its commitment to acquiring bill payment solutions provider KUBRA for $372 million, directly responding to a public campaign by Veradace Partners L.P. to terminate the deal.

The conflict has cast a spotlight on the company's governance and capital allocation strategy, coming after REPAY's stock plummeted 17% on the day the acquisition was announced and has continued to underperform major indices. The dispute pits REPAY's board, which sees the KUBRA deal as a crucial long-term growth driver, against a major shareholder that argues the transaction is excessively risky and ignores investor sentiment.

The Activist's Demands

Veradace Partners, which holds a substantial 8.4% stake in REPAY's Class A shares, has taken a firm and public stance against the acquisition. In an open letter addressed to REPAY's independent board members on April 9, the activist firm laid out a series of non-negotiable demands.

Foremost among them is the immediate abandonment of the KUBRA transaction. Veradace argues that the deal's size and the leverage required to finance it are "excessively high," particularly given what it calls REPAY's "depressed valuation." The firm claims to have surveyed other major shareholders and found "unanimous opposition" to the deal among actively managed investors, suggesting a deep rift between the board and its institutional backers.

Beyond halting the acquisition, Veradace is pushing for significant governance changes. The firm has demanded the immediate appointment of two new shareholder representatives to the Board of Directors to "restore investor confidence." It has also called for a formal investigation into the KUBRA transaction process to determine if it involved any breach of fiduciary duty. To ensure its voice is heard, Veradace has insisted that the acquisition should not close until after the company's 2026 Annual Meeting of Stockholders.

The activist investor painted a picture of a board that is out of touch with its shareholders, claiming that its attempts to engage privately with directors since December 2025 were largely ignored. This perceived lack of dialogue, Veradace suggests, has eroded trust and necessitated a public confrontation.

REPAY's Strategic Defense

In its response, REPAY's Board of Directors and management team presented a united front, defending the KUBRA acquisition as a carefully considered strategic move essential for long-term value creation. The company's statement emphasized that the deal is a cornerstone of its growth strategy.

"The KUBRA acquisition will enhance REPAY’s scale in bill payments, strengthen its position in highly reoccurring, non-discretionary payment flows, and expand relationships with enterprise clients," the company stated. REPAY highlighted that the board had evaluated the transaction within its broader capital allocation framework, which also includes prior share repurchases and a commitment to "ongoing balance sheet discipline."

REPAY countered Veradace's claims of being ignored, stating it "has engaged constructively with Veradace over an extended period" and has "carefully considered their perspectives alongside input from other shareholders." The board reiterated its focus on acting in the best interests of all shareholders, implying that Veradace's short-term concerns do not align with the company's long-term vision.

The company also underscored that the acquisition is not a theoretical proposal but a binding commitment. It is governed by a definitive purchase agreement and supported by committed debt financing from Truist Bank. The deal now only awaits required regulatory approvals and other customary closing conditions, with REPAY noting that "no action is required from shareholders at this time."

A Closer Look at the Deal

At the heart of the dispute is the $372 million all-cash acquisition of KUBRA Data Transfer Ltd., a move REPAY believes will transform its position in the bill payment market. The deal will be financed primarily through debt, with REPAY securing a $500 million term loan. This will increase the company's net leverage to approximately 4.0x at closing, a figure that has clearly unsettled investors like Veradace. However, REPAY has publicly committed to a deleveraging plan, targeting a reduction to below 3.0x within 18 months post-closing.

The strategic rationale hinges on scale and synergy. KUBRA provides bill presentment and payment solutions to clients in resilient sectors like utilities, government, and insurance, and its platform already reaches over 40% of households in the U.S. and Canada. REPAY projects that the combined entity will generate approximately $548 million in revenue and $178 million in adjusted EBITDA based on 2025 figures.

Furthermore, REPAY anticipates unlocking significant value through integration. The company is targeting over $15 million in annual run-rate cost synergies, an additional $5 million in technology savings over three years, and incremental revenue opportunities exceeding $5 million by 2028 through cross-selling. Management projects these benefits will lead to a 25% accretion in free cash flow by 2028, arguing that the upfront leverage is a necessary step to achieve substantial future returns.

Market Jitters vs. Industry Trends

Despite management's optimistic projections, the market's initial reaction was overwhelmingly negative. The 17% single-day drop in REPAY's stock price, followed by continued underperformance, reflects deep shareholder skepticism. This sentiment is the primary ammunition for Veradace's campaign, which argues the board is destroying shareholder value.

However, not all market observers agree. Analysts at Benchmark maintained a "Buy" rating on RPAY, calling the market's severe reaction "overdone" and pointing to the long-term strategic value of creating a bill-payment utility with massive household reach. Similarly, DA Davidson reiterated its "Buy" rating, signaling confidence in the deal's merits despite the stock's volatility.

This divergence in opinion highlights a broader tension in the fintech landscape. The global bill payment market is undergoing rapid transformation, driven by a consumer shift to digital channels and enterprise demand for cost-saving electronic solutions. The market is projected to grow to over $24 billion by 2035. In this environment, consolidation is a key strategy for players seeking to gain scale, expand their technological capabilities, and secure a foothold in durable, non-discretionary payment verticals. Acquisitions like the one REPAY is pursuing are becoming common as companies race to build comprehensive platforms. This industry-wide push for consolidation suggests that while the financial terms of the KUBRA deal may be contentious, the underlying strategic impulse is a direct response to powerful market trends shaping the future of payments.