The $1 Billion standoff: Forager Capital vs. Repay Holdings
A take-private bid, a poison pill, a boardroom rejection, and a proxy fight — inside one of fintech's most contested deals of 2026
There’s a full-blown corporate governance battle playing out in the fintech payments space, and most mainstream financial media has barely touched it. Forager Capital Management is attempting to take Repay Holdings (NASDAQ: RPAY) private for $4.80 per share in cash. The Repay board has unanimously rejected the offer, adopted a poison pill, pursued a contentious $372 million acquisition of its own, and refused to engage in any substantive dialogue with the acquirer for more than two weeks.
If you’re an investor, analyst, or M&A professional, this deal has something for everyone: activist dynamics, defensive M&A, contested proxy filings, governance questions, and a legitimately uncertain outcome leading causing an interesting investor arbitrage (special) situation.
Who Are the Parties?
Forager Capital Management is a Birmingham, Alabama-based investment firm run by Managing Partner Edward Kissel. Forager has followed Repay since its IPO and has quietly built a ~13% stake in the company to become the single largest shareholder of record. The firm is not a passive investor. It recently completed the acquisition of Quipt Home Medical, a publicly listed company, for approximately $260 million. They have the financial firepower and transactional experience to close a deal of this nature.
Repay Holdings Corporation (NASDAQ: RPAY) is an Atlanta-based fintech company that provides vertically-integrated payment processing solutions with niche focus on healthcare, personal lending, automotive and consumer finance. The company’s platform supports payments across digital wallets, ACH, credit/debit cards, and electronic checks. Repay went public via SPAC in 2019 and has grown through a series of acquisitions. It currently has approximately 85.9 million shares of Class A common stock outstanding, with a market capitalization of roughly $333 million as of this week (early May 2026).
The Deal Timeline: A Rapid Escalation
This situation went from private outreach to public proxy fight in under three weeks. Here’s the sequence:
April 13, 2026: Forager contacts Repay management (John Morris, CEO; Rob Houser, CFO; Stewart Grisante, General Counsel) to request a “preliminary, exploratory discussion” about a potential acquisition. Forager explicitly noted it had not yet formed a definitive plan or proposal.
April 14, 2026 (within 24 hours): Without any substantive dialogue, Repay’s Board adopts a shareholder rights plan (a “poison pill”), effective immediately and running through April 2027. The plan triggers if any holder acquires 12.5% or more of outstanding Class A common stock. This threshold was clearly calibrated to box out Forager, which already sits at ~12.9%. Forager described the board’s speed as “difficult to reconcile with a genuine commitment to maximizing shareholder value.”
April 17, 2026: Forager goes public. It files an amended Schedule 13D/A with the SEC and releases a formal letter to the board proposing to acquire 100% of Repay’s outstanding shares at $4.80 per share in all-cash. This represents a 75% premium to the stock’s 30-day volume-weighted average price of $2.75. The total enterprise value, including debt, is approximately $1 billion. The same day, Repay confirms receipt of the proposal and states the board will review it with financial and legal advisors (J.P. Morgan Securities and Sullivan & Cromwell LLP).
April 28, 2026: Ten days have passed. No engagement. Forager issues a public statement expressing concern that the board’s only responses have been to adopt a poison pill and issue a preliminary earnings release. Forager says these actions “raise questions about whether the appropriate focus is being placed on evaluating a compelling proposal versus implementing defensive measures.”
May 1, 2026: Repay files a Preliminary Contested Proxy Statement (PREC14A) with the SEC, signaling that a formal proxy fight is now on the table. In the same filing, the board denied a separate request from Veradace Partners (an 8.4% stockholder) to waive bylaw timing requirements for director nominations, ruling that Veradace failed to comply with required procedures.
May 4, 2026 (Q1 Earnings Call): In what was a highly charged call, Repay CEO John Morris and CFO Rob Houser did not take questions on the Forager proposal. Management confirmed the board had unanimously rejected the $4.80 offer, characterizing it as one that “significantly undervalues the company” and is “not in shareholders’ best interest.” That same day, Forager issues yet another public statement noting that 17 days had elapsed without any substantive communication whatsoever from the board or its advisors.
The Valuation Question: Is $4.80 Really “Significantly Undervaluing” Repay?
Forager’s Case
At $4.80 per share, Forager’s offer represents a 75% premium to the 30-day VWAP at the time of the proposal. In a year where take-private premiums have averaged well below 40%, this is an aggressive bid. Forager has pointed out that this premium is “among the highest observed in announced take-private transactions this year.” The offer provides immediate, certain, all-cash value in an environment where RPAY has been trading in the $2.50–$3.50 range for much of the past year.
Repay’s Case
The board isn’t wrong that there’s a credible bull case above $4.80. Here’s the math the board is likely pointing to:
DA Davidson maintains a Buy rating on RPAY with a price target of $8.00 per share, reflecting the strategic value of the pending Kubra acquisition and REPAY’s growth trajectory toward double-digit revenue growth.
InvestingPro’s Fair Value estimate places RPAY at approximately $5.82 per share, suggesting the $4.80 offer does represent a discount to intrinsic value under more optimistic assumptions.
Analyst price targets range from $3.50 to $10.00, reflecting genuine uncertainty about execution on Kubra and longer-term growth potential.
Q1 2026 adjusted EBITDA margins of ~43% and full-year guidance of $340M–$346M in revenue (+10–12% YoY) suggest a business with real profitability discipline.
The crux of the disagreement is whether you trust management’s ability to close and integrate Kubra, deleverage the balance sheet, and actually achieve double-digit revenue growth. If you do, $4.80 is a lowball offer. If you’re skeptical then $4.80 looks like a good deal.
The Kubra Wildcard
Overlaying all of this is Repay’s announced acquisition of Kubra Data Transfer for $372 million. This would roughly double Repay’s total revenue by adding a bill presentment and payment processing platform serving utility companies and government agencies. Management has been emphatic that Kubra is the company’s most compelling long-term value creation opportunity, offering interaction with over 40% of US and Canadian households monthly.
But Kubra has attracted vocal opposition from Veradace Partners, which owns 8.4% of Repay and publicly objected to the acquisition on April 9. Veradace cites poor capital allocation, elevated leverage risk, governance failures and a sharp stock selloff following the announcement. Veradace wants the Kubra deal terminated and two board seats.
The board denied Veradace’s director nomination request on procedural grounds, which itself raises governance questions. Repay’s filing of a preliminary contested proxy statement on May 1 suggests management is prepared to fight on two simultaneous fronts: defending the Kubra deal and rebuffing Forager’s acquisition proposal.
From a strategic standpoint, completing Kubra would substantially change Repay’s risk/valuation profile, likely making the $4.80 bid a non-starter for shareholders (assuming the integration goes smoothly).
Repay’s Q1 Financials: Context for the Bid
Here’s where RPAY stands operationally, which directly informs whether the board’s confidence in rejecting $4.80 is well-founded:
Q1 2026 Revenue: $80.8 million (+4% YoY) which slightly missed estimates
Adjusted EBITDA: $34.4 million (~43% margin)
Adjusted EPS: $0.22/share (beat estimates by $0.01)
Business Payments growth: +18% YoY (the standout
Consumer Payments growth: +4% YoY
FY2026 Revenue Guidance: $340M–$346M (+10%–12%)
FY2026 Adjusted EBITDA Margin: ~42%
Free Cash Flow (Q1): $5.4 million (16% conversion; weighed by one-time items including debt refinancing)
One notable item: Repay refinanced its maturing 2026 convertible notes using $37M in cash and a $110M revolving credit draw in Q1 which tightens near-term liquidity even as management touts financial strength. The debt picture will only get more complicated post-Kubra, with the company targeting a return to below 3x net leverage within 18 months of closing.
The Current Share Price and What the Market Is Telling Us
As of this writing (May 6, 2026), RPAY is trading around $4.00–$4.11 per share — approximately 15–17% below the Forager bid price of $4.80. The stock surged approximately 27% on April 17 when the Forager offer became public (from mid-$3s), and has since settled back as the board’s defensive posture became clear and the Q1 earnings call left investors without a clear resolution.
The market-implied probability of the deal closing at $4.80 (based on the ~$0.70–$0.80 spread) is roughly 25–35%, which reflects the market’s view that there is a meaningful but not dominant chance this deal gets done at current terms. The spread also prices in some probability of a sweetened offer.
Insights for Investors
Arb opportunity, but not risk-free. The ~17% spread to the offer price offers a meaningful return if the deal closes, but RPAY traded at $2.50–$2.75 before Forager appeared. If this falls apart entirely, there’s real downside risk especially if Kubra closes at a high leverage ratio and execution risks materialize.
Watch the shareholder registry. With Forager at ~13% and Veradace at ~8.4%, approximately 21% of shares are controlled by institutional activists who either want a sale or major strategic changes. This is a large enough block to create serious pressure on management going into the annual meeting.
The poison pill expiration matters. The rights plan runs until April 2027. This limits Forager’s ability to accumulate further shares in the open market without triggering dilution for other stockholders. But it doesn’t prevent a proxy fight or a tender offer. Expect Forager’s next move may be to go directly to shareholders via a tender.
Kubra is the swing factor. If the Kubra deal closes cleanly in Q2 2026 as expected, the board’s argument that $4.80 undervalues the company becomes more credible. If Kubra hits a snag, Forager’s offer starts looking more attractive to all holders.
Insights for M&A Professionals
This situation illustrates several dynamics that make this an excellent M&A cast study.
The “poison pill within 24 hours” problem. Repay’s lightning-fast poison pill adoption, well before any formal proposal was even made, is legally defensible but optics-damaging. It signals entrenched management rather than a good-faith deliberative process. Expect shareholder advisory firms like ISS and Glass Lewis to scrutinize this closely.
Defensive M&A as a “just say no” strategy. Using the Kubra acquisition to claim a higher standalone value (while simultaneously piling on debt) is a classic defensive M&A playbook. It’s a legitimate strategy, but it creates execution risk and, if Kubra underperforms, significant board liability.
The dual-activist dynamic. Both Forager (pro-acquisition) and Veradace (anti-Kubra) are pressuring management from different angles simultaneously. This is rare and destabilizing for incumbent boards. Management must choose: engage with Forager and risk legitimizing the offer, or continue ignoring both activists and risk losing the proxy vote.
Proxy contest mechanics. The PREC14A filing means Repay has drawn first blood in the proxy war. Forager could respond by nominating its own slate of directors that would force shareholders to choose between the incumbent board and Forager-backed nominees. Given Forager’s 13% stake, it would need to win over approximately 38–40% of remaining holders to achieve a majority. While tough, this is not impossible especially given that they can likely count on Veradace’s support (8% of the shares).
Will This Deal Close? Our Take
Here are the three scenarios, ranked by probability:
Scenario 1: Sweetened Offer / Negotiated Deal (40% probability)
The most likely resolution is a negotiated transaction at a price somewhere above $4.80. The board has unanimously rejected $4.80, but that’s a negotiating position. M&A deals often involve early rejections. Forager has demonstrated financial capacity and deal-closing credibility. If Kubra faces regulatory delays, Forager raises its bid to the $5.25–$5.75 range, and activist pressure continues to build, the board may be compelled to engage. This is the scenario where shareholders win big.
Scenario 2: Deal Falls Apart / Repay Remains Independent (35% probability)
If Kubra closes cleanly, the board has a credible narrative: “We were right to reject $4.80. Look at our combined revenue base now.” Under this scenario, Forager eventually reduces its stake or accepts minority investor status, and RPAY attempts to execute on its post-Kubra strategic plan. The risk here for shareholders is that Repay’s stock returns to pre-bid levels ($2.50–$3.00) if execution disappoints. For investors currently holding at $4.00+, this would be a painful outcome.
Scenario 3: Proxy Fight / “Hostile” Shareholder Vote (25% probability)
If the board continues to stonewall and refuses to engage, Forager may escalate to a tender offer directly to shareholders, or file its own proxy to replace board members. With ~21% of the float controlled by activists (Forager + Veradace, who want different outcomes but both want change), a contested vote is a real possibility. A successful proxy could ultimately lead to a new board that is more receptive to a deal. Notably, in Delaware law (where Repay is incorporated), a determined acquirer with sufficient shareholder support can ultimately prevail even against poison pills.
Our Verdict: The terms will be sweetened, but not immediately. Forager’s public pressure campaign citing market comps and going directly to shareholders is the playbook for forcing a board to the table without triggering a full proxy fight. We expect Forager to raise its bid by $0.50–$0.80 per share (to the $5.25–$5.60 range) over the next 4–6 weeks, contingent on Kubra’s status. If that sweetened offer is also rejected, a tender offer or proxy fight becomes near-certain.
The board’s complete refusal to engage (even through advisors) is increasingly difficult to defend fiduciarily. At some point, ISS and Glass Lewis will weigh in, and their recommendations will be critical for the annual meeting proxy vote.
Bottom Line
The Forager-Repay situation is a live case study in everything that makes M&A compelling: a motivated acquirer with a credible bid, an entrenched board pursuing a high-stakes counter-strategy, competing activist blocs, and genuine uncertainty about which path creates the most value.
At $4.80, the offer is real, the premium is legitimate, and the deal is financeable. Whether it’s the right price is genuinely debatable, and this creates opportunities for investors looking at special situation / merger arbitrage
For investors holding RPAY: the risk/reward from current levels ($4.00–$4.11) to the offer price ($4.80) is approximately 17% upside, against meaningful downside if both the deal and the Kubra integration disappoint. That’s an asymmetric trade worth watching closely.
For M&A professionals: study the poison pill timing, the defensive acquisition thesis, and the dual-activist dynamic. Whatever the outcome, this is a textbook example of how hostile bid situations actually unfold. This one is messy, public, and will be decided as much by governance mechanics as by economics.
Stay tuned. This one has plenty of runway left.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. The author does not hold positions in RPAY or any affiliated entity. All data sourced from publicly available SEC filings, press releases, and financial reports.