“Several parties” have conveyed acquisition interest in payment processing company Shift4 Payments, CEO Jared Isaacman said Wednesday.
Isaacman declined to name any of those parties, but said they’ve reached out to the company or its lead bank, Goldman Sachs. The company’s board is now leading “the exploration effort,” he said during an interview.
Shift4 executives haven’t been shy about expressing frustration with the company’s public market valuation in recent months. Isaacman suggested last December the company, which went public in June 2020, may go back to being private.
“We have, for whatever reason, attracted more interest from fast-money hedge funds that like to play games, and that’s just reached a breaking point for management,” said Isaacman, who founded the Allentown, Pennsylvania-based company in 1999.
In the company’s Nov. 8 third-quarter letter to shareholders, Isaacman wrote that it feels as though “the crowd cheering for us to trip and fall is louder than those rooting for our success.” He said Shift4 is “actively exploring strategic opportunities and alternatives that will reduce distractions and serve our company, employees and shareholders best.”
Since the letter was issued, Shift4’s stock price has jumped, rising about 16% as of the end of trading Wednesday.
Shift4 has an established payments presence in the hospitality industry, serving restaurants, hotels, stadiums and entertainment venues with its software and payment processing services. The company has been an active acquirer itself in recent months, most recently scooping up the sports and entertainment unit of rival SpotOn for $100 million.
In the third quarter, Shift4 reported net income of $46.5 million, nearly flat with $46.4 million for the same quarter of 2022, according to the company’s shareholder letter. Its revenue rose 23% to $675.4 million over the year-ago period.
Isaacman said he doesn’t want to be a “whiner” and “every fintech moved double-digits one way or the other this past quarter.” Things could smooth out in the public markets, he noted.
However, “the board is taking a more active effort than just that, which is, let’s see what options are available, either in the private markets or perhaps aligned with another strategic” buyer, Isaacman said. “So it’s in the board’s hands.” A spokesperson for the company declined to comment on when Shift4 received expressions of acquisition interest.
Isaacman said he has no regrets about taking the company public – Shift4’s IPO made him a billionaire – but he believes Shift4 could grow faster and execute better as a private company.
“Anything is a better alternative than the environment we've been in,” he said. Shift4 management owns 40% of the company’s equity and controls more than 80% of the vote, Isaacman said, so a management-led buyout “is certainly in the realm of possible.”
Isaacman declined to identify when the company could go private if such a move occurs, “but the sooner, the better in my mind.”
