Priority Technology Holdings plans to acquire Plastiq, which filed for Chapter 11 bankruptcy protection Wednesday (May 24).
Priority has entered into a definitive agreement to acquire most of the assets of Plastiq and certain of its affiliates, subject to bankruptcy court approval and any higher and better offers Plastiq may receive during the auction process, the companies said in a Wednesday press release.
The acquisition would enhance Priority’s B2B embedded finance solutions by adding Plastiq’s bill pay and instant working capital access platform, which serves small and medium-sized businesses (SMBs), according to the release.
“Our decision to enter into this agreement was simple,” Priority Chairman and CEO Thomas Priore said in the release. “Strategically speaking, Plastiq’s buyer-driven B2B product suite is a natural complement to our CPX Automated Payables offering, and the company has an extremely talented team with a mindset that will fit naturally into the collaborative and execution-oriented culture at Priority.”
The two companies are already partners for payment processing, so Priority is well positioned to support Plastiq’s restructuring, serve its customers, and help it scale and optimize its operations, Priore said in the release.
Priore added that Priority has done so in the past with its acquisitions of Cynergy Data and Rent Payments.com.
“We are excited that Priority believes in Plastiq’s business and the potential for the future of Plastiq, Powered by Priority,” Plastiq CEO Eliot Buchanan said in the release. “We know it can be a great fit for our customers and employees as we drive our operation forward.”
The embedded finance market is large and growing, and the greatest market impact may be seen in B2B payments, Priore wrote in the PYMNTS eBook, “2023 Payments New Year’s Resolutions.”
“Our focus for 2023 is to not only support this trend, but lead it, providing a payment platform that combines features of payments and banking providing demand- and supply-side payment rails, but also offers embedded features of modern banking like escrow funds but faster and with less friction than a bank,” Priore wrote.
Embedded finance offers a way to help smooth out the friction between buyers and suppliers, Priore told PYMNTS’ Karen Webster in an interview posted in February.
The stage is set for more widespread adoption of embedded finance, particularly across various trades, Priore said.
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