Priority Technology's $1.6 Billion Buyout Tests Minority Shareholder Protections

Priority Technology Holdings announced on September 21, 2026, that it would go private in a deal led by its chief executive, Thomas Priore, with backing from Searchlight Capital Partners. The $1.6 billion transaction values shares at $8.05 each—a 38% premium to Priority's closing price on September 18, 2026, the last trading day before announcement, and a 65% premium to the stock price on November 7, 2025, the last trading day before Priore's initial proposal became public. Priority generated $879.7 million in revenue in 2024, growing 16.4% year-over-year, with adjusted earnings before interest, taxes, depreciation and amortization of $204.3 million, up 21.3% annually.

The deal illustrates the legal mechanics and procedural safeguards that govern insider-led buyouts, particularly how special committees of independent directors negotiate terms to prevent controlling shareholders from exploiting minority investors. Priority also reflects a broader consolidation wave in payments technology, where private equity has returned to deploy capital in businesses with recurring revenue and stable customer bases. The transaction is expected to close in the first half of 2027 after stockholder approval and regulatory clearances.

The conflict of interest and the Delaware test

When a company's chief executive proposes to buy the firm—or lead an investor group that does—a conflict of interest arises: the CEO's incentive to pay less as a buyer clashes with the fiduciary duty owed to all shareholders. Delaware courts, which govern disputes over many public companies' internal affairs, have held that such transactions can be reviewed under the deferential "business judgment rule" only if specific procedural protections are in place.

In the 2014 case Kahn v. M&F Worldwide Corp., the Delaware Supreme Court established a six-part test. The controller must condition the transaction, from the outset, on approval by both a special committee of independent directors and a favorable vote by holders of a majority of shares not affiliated with the buyer. The special committee must be independent, have power to "freely select its own advisors and to say no definitively," meet its duty of care in negotiating a fair price, and ensure that the minority vote is informed and free of coercion. If all six conditions are satisfied, courts apply the forgiving business judgment standard. If they are not, disputes proceed under the more demanding "entire fairness" test.

The rationale is that when a controller voluntarily relinquishes control over the deal—by committing upfront to both committee and minority approval—the transaction resembles an arm's-length merger between unaffiliated parties. The procedural protections are meant to substitute for the market mechanism.

How Priority's special committee negotiated price improvement

Priority Technology's special committee, described in SEC filings as independent and disinterested directors, began evaluating Priore's proposal after it became public in November 2025. The committee, with its own legal counsel and financial advisers, conducted what its chair called "a comprehensive evaluation of the proposal, a rigorous valuation analysis, and extensive negotiations with Tom and his affiliates." Over several months, the agreed price climbed to $8.05 per share—a gain of more than 30 percent from the opening position.

The committee's negotiating power derived from multiple sources. Second, Priore's offer carried no financing condition, meaning Searchlight's equity commitment was not contingent on securing outside funding. Third, the committee could recommend rejection or continued negotiation, potentially inviting other bidders or triggering litigation if shareholders felt the price was inadequate. The special committee chair emphasized in public statements that the final deal represented "the best path for the unaffiliated stockholders to realize the significant value from their investment in the Company."

The $8.05 price is also notable in context of Priority's recent financial performance. For 2024, the company reported adjusted earnings per share of $0.51, up 750% from $0.06 the year before. Revenue had grown 16.4% to $879.7 million, and adjusted gross profit margin expanded 90 basis points to 37.3%, reflecting improving operational efficiency. That financial momentum created a credible alternative for the committee: hold the company as a public entity and let it grow. The price had to compensate shareholders for walking away from that upside.

Structure: insider plus sponsor capital

The acquisition will be executed by an investor group led by Priore. Searchlight Capital Partners, a private investment firm with a track record of payments and fintech investments, is providing equity financing commitments. This structure is standard in sponsor-led insider buyouts: the insider brings operational knowledge and skin in the game, while the sponsor brings capital, governance expertise, and a network to support growth and eventual exit.

Searchlight has invested extensively in payments and fintech. The firm backed Sightline Payments, valuing that business at $525 million. The Priority deal follows a pattern: acquire a profitable, recurring-revenue platform; invest to enhance capabilities; expand customer accounts; and eventually sell or refinance at a higher multiple.

The transaction is not subject to a financing condition, a significant detail: it means Searchlight's equity commitment is binding and unconditional. Closing is scheduled for the first half of 2027, pending stockholder approval and customary regulatory clearances. Upon completion, Priority's stock will be delisted from the Nasdaq Global Select Market, and the company becomes private.

Priority's business model and why sponsors are interested

Priority Technology operates through a unified platform spanning merchant services, payables, and banking and treasury solutions, providing payments and banking-as-a-service capabilities that help businesses collect, store, lend and send money. The company ended 2024 with approximately 1.2 million customer accounts and processed $130 billion in annual transaction volume.

These business lines generate recurring revenue: software subscriptions, transaction fees, and payment processing margins. Recurring revenue is highly attractive to private equity sponsors because it produces predictable cash flow, supports higher valuation multiples, and persists even during economic downturns. Payments platforms also benefit from consolidation: independent sales organizations and point-of-sale providers fragmented across the U.S. often lack the scale or technology investment to compete with larger acquirers.

Public markets have been harsh on some payments companies recently, with Fiserv's stock, for instance, falling 70% over the past year. Compressed multiples create an opportunity for a sponsor to acquire a stable, growing business at an accessible price, invest to build scale, and harvest value in a private-equity exit (sale to a larger strategic buyer, refinancing, or secondary sale). Priority fits this profile: profitable, growing, fragmented market adjacency, and management that is willing to take the company private.

Consolidation and private equity's renewed appetite for software

Priority's transaction is one data point in a broader consolidation wave in financial technology and payments. Payments-specific deal value was higher in the first half of 2026 than in the same period of 2025, according to the industry tracker TSG, even as broader U.S. private-equity deal value fell 10.6% to $461 billion in the first half of 2026 from $515.5 billion a year earlier, with sponsors retreating mainly from large, financing-dependent transactions while continuing to support smaller deals.

Several trends are driving consolidation. First, valuation compression at some payments and software companies — Fiserv's stock, for instance, fell 70% over the past year — has widened the gap between what private equity can pay and what public shareholders demand. Second, payments software platforms have fragmented geographic and vertical distribution, creating targets for roll-up strategies. Third, recurring-revenue business models continue to attract private-equity buyers even as broader software dealmaking cooled sharply in 2026 amid growing uncertainty over how artificial intelligence could disrupt competitive positions within a typical holding period.

Within overall U.S. private-equity buyouts in the second quarter of 2026, add-on acquisitions—where a sponsor builds a portfolio of smaller companies and integrates them—still accounted for an estimated three-quarters of all buyout activity, even as their count fell 31.2% year over year and value dropped 44.5% to $52.6 billion. Platform deal count fell 34% to 289, as sponsors increasingly bolted assets onto companies they already owned rather than funding new platforms. Software deal value specifically fell 65.7% year over year to $10.7 billion, reflecting sponsors' caution about how artificial intelligence could reshape competitive positions within a typical holding period.

What the deal signals about Priore's confidence

The decision by a founder or long-tenured CEO to take a company private is often interpreted by the market as a bearish signal—the executive believes the public valuation is too low. Alternatively, it can signal confidence in a private-ownership structure to invest long-term without quarterly earnings pressure. Priore has led Priority, and the company has achieved steady growth and improving profitability, as reflected in 2024's 16.4% revenue growth and 21.3% EBITDA growth.

Priore's willingness to partner with Searchlight rather than engineer a simple leveraged buyout also signals something: the CEO is seeking a sponsor with payments expertise, board governance, and connections across the fintech ecosystem. Searchlight has built a track record in payments. The $1.6 billion enterprise value is substantial, but not extraordinary for a payments platform processing $130 billion annually and generating $200+ million in EBITDA—suggesting there may be significant upside if the sponsor can grow the business and improve profitability over a five-to-seven-year hold.