Julie & Holleman is investigating the proposed acquisition of Priority Technology Holdings, Inc. by an investor group led by Thomas Priore, Priority's Chairman and Chief Executive Officer, under which the group would acquire all outstanding Priority shares it does not already own for $8.05 per share in cash, in a transaction with an enterprise value of approximately $1.6 billion. Because the buyer is led by Priority's own Chairman and CEO rather than an unrelated third party, the transaction presents potential conflicts of interest, and the firm is examining whether the process leading to the transaction and the $8.05 per-share price are fair to Priority's unaffiliated stockholders.
What happened
Priority Technology Holdings has entered into a definitive agreement with an investor group led by Thomas Priore, Priority's Chairman and Chief Executive Officer. Under the agreement, the investor group would acquire all outstanding Priority shares that it does not already own for $8.05 per share in cash, in a transaction with an enterprise value of approximately $1.6 billion. If the transaction closes, Priority's unaffiliated stockholders would receive $8.05 in cash for each share and would no longer hold an interest in the company.
According to the company, a special committee of independent and disinterested directors evaluated the proposal and negotiated with the investor group, and those negotiations resulted in a price increase of more than 30% from the investor group's initial proposal. The transaction requires approval by a majority of the Priority shares not affiliated with the investor group, along with regulatory approvals and other customary closing conditions. The company expects the transaction to close in the first half of 2027.
Why we're looking at it
The buyer is not an unrelated third party. The investor group is led by Priority's own Chairman and Chief Executive Officer, Thomas Priore, who already owns Priority shares. A transaction in which a company's Chairman and CEO is part of the group acquiring the company may create interests that differ from those of the company's unaffiliated stockholders.
The company has also disclosed that Mr. Priore previously informed the special committee that he did not intend to sell his stake to any third party. We are examining the circumstances surrounding the proposed transaction, including the process that led to the agreement, whether that stated position affected the company's ability to pursue alternative transactions, and whether the transaction treats Priority's unaffiliated stockholders fairly.
What we're investigating
We are investigating whether Priority's directors, officers, and others involved in the transaction fulfilled their fiduciary and other legal obligations to the company's unaffiliated stockholders. We are examining, among other things:
- the process that produced the $8.05 per-share price;
- potential conflicts arising from the fact that the acquiring investor group is led by Priority's Chairman and Chief Executive Officer;
- the significance of Mr. Priore's stated position that he did not intend to sell his stake to any third-party bidder;
- whether that position constrained or affected the company's ability to pursue alternative transactions;
- the formation, independence, and role of the special committee, and its negotiations with the investor group;
- the financial analyses supporting the merger price;
- the protections afforded to unaffiliated stockholders, including the requirement that the transaction be approved by a majority of the shares not affiliated with the investor group; and
- whether Priority stockholders will receive complete and accurate information regarding the transaction and the sale process.
What this means for Priority stockholders
If the transaction closes, Priority's unaffiliated stockholders will receive $8.05 in cash for each share they own and will no longer hold an interest in the company. Stockholders may have legal rights relating to the transaction, including rights concerning the process by which it was negotiated and approved, the information provided to stockholders, and the consideration they will receive. Priority stockholders with questions about the transaction or their rights are encouraged to contact us.