Background

In December 2024, Payfare, a Toronto-based financial technology company specializing in digital banking solutions for workforces, entered into a definitive agreement to be acquired by Fiserv, a leading global provider of payments and financial services technology. The all-cash transaction valued Payfare at approximately $201.5 million, offering shareholders $4.00 per issued and outstanding share.

Challenges

The company faced two significant challenges.

1. Influential Opposition: Despite the ~92% premium to the 60-day VWAP, the company’s largest shareholder holding over 10% of the company’s stock ran a Vote NO campaign, calling the premium “misleading”, the stock price “deeply distressed”, and the value “nearly equal to the aggregate of the company’s cash and cash equivalents, investments and loan receivables”. Given their size, the shareholder had the means to immediately impact the transaction.

2. Limited Shareholder Visibility: The visibility into the company’s shareholder base was limited due to objecting beneficial shareholders and scattered retail investors with small positions. This compounded the risk of failing to secure shareholder approval given the three-year historical average turnout for shareholder meetings.

Under these circumstances, receiving more than 2/3rd of the shareholder votes in favour of the transaction – after excluding certain votes as per Rule MI 61-101 – would be a difficult task, but a situation Kingsdale thrives on.

Kingsdale’s Strategic Involvement

To navigate these complexities, Payfare engaged Kingsdale Advisors as its Strategic Shareholder and Communications Advisor. Kingsdale’s comprehensive strategy included:

· Advising Company Leadership: Kingsdale’s proxy solicitation team advised company leadership on potential challenges to be expected and provided real-time vote intelligence as well as shareholder sentiment. This included running daily projections using real-time data and providing multiple outcome scenarios with back-up strategies for each.

· Data-Driven Approach: Kingsdale’s data and research team increased visibility into the shareholder base by over 130% using public sources and strategies perfected over 22 years.

· Compelling Communication Strategy: Kingsdale’s communications specialists crafted clear, persuasive messaging outlining the advantages of the transaction, the risks of non-approval, and endorsements from ISS and Glass Lewis. Strategic public statements ensured Payfare controlled the narrative.

· Intensive Shareholder Engagement: Kingsdale’s engagement centre managed inbound inquiries and conducted targeted outreach using pre-approved messaging to educate shareholders on the transaction’s benefits, addressing concerns and emphasizing the immediate value of the all-cash offer. Every small retail shareholder vote mattered for a successful outcome. Kingsdale’s engagement specialists worked through weekends and late nights reaching out to every last shareholder contact that could be identified.

· One Kingsdale Approach: Leveraging its complementary expertise under one roof, Kingsdale managed the end-to-end shareholder engagement process and worked with third-party advisors as well as Fiserv, the acquiring company. Kingsdale had a single point of contact for all communication, making the process seamless and efficient for Payfare.

Outcome

The combined efforts led to a significant 30% increase in shareholder turnout compared to the historical average. The transaction received overwhelming support, with over 80% of voting shareholders approving the acquisition.

Conclusion

Kingsdale Advisors’ comprehensive approach and expertise in proxy solicitation, governance advisory, data and research, vote driving strategies and clear messaging, played a pivotal role in overcoming the challenges of getting the shareholder approval for Payfare’s acquisition by Fiserv.

The transaction successfully closed in Q1 2025.

Situations like these is where we set ourselves apart from other providers.