Shift4 Announces Closing of Offering of $1,100.0 Million of Senior Notes due 2032

Rhea-AI Summary

Shift4 Payments, Inc. (NYSE: FOUR) has successfully completed its previously announced offering of $1,100.0 million aggregate principal amount of 6.750% senior notes due 2032. The notes, issued by subsidiaries Shift4 Payments, and Shift4 Payments Finance Sub, Inc., are guaranteed by certain of Shift4's subsidiaries. The company plans to use the net proceeds for general corporate purposes, including working capital, acquisitions, debt retirement, stock repurchases, and other business opportunities.

Shift4 intends to use part of the proceeds to repay outstanding borrowings under its $690.0 million of 0.00% Convertible Senior Notes due 2025 and/or $450.0 million of 4.625% Senior Notes due 2026. The notes were offered privately to qualified institutional buyers in the U.S. and outside the U.S. in accordance with Rule 144A and Regulation S of the Securities Act of 1933.

Positive

• Successful completion of $1,100.0 million senior notes offering
• Potential for debt refinancing, reducing interest expenses
• Increased financial flexibility for acquisitions and business opportunities

Negative

• Increased long-term debt with 6.750% interest rate
• Potential dilution if convertible notes are converted to equity

Insights

Financial Analyst

Shift4's $1.1 billion senior notes offering is a significant financial move with both positive and negative implications. On the positive side, it provides substantial liquidity for strategic initiatives such as acquisitions, debt retirement and stock repurchases. The $1.1 billion influx strengthens Shift4's financial position, potentially enabling growth and market expansion.

However, the 6.750% interest rate is relatively high in the current environment, which could increase the company's interest expenses. The intention to use proceeds to repay existing debt, including the $690 million 0% convertible notes and $450 million 4.625% notes, suggests a debt restructuring strategy. While this may optimize the capital structure, it also increases the overall cost of debt.

Investors should monitor how effectively Shift4 deploys this capital and whether it translates into improved financial performance and shareholder value in the long term.

Market Research Analyst

Shift4's substantial $1.1 billion notes offering signals strong investor confidence in the company's growth prospects within the integrated payments and commerce technology sector. This move aligns with the industry trend of fintech companies leveraging debt markets to fuel expansion and innovation.

The company's focus on acquisitions and business opportunities suggests an aggressive growth strategy, which could potentially lead to increased market share and diversified revenue streams. However, investors should be cautious about the execution risks associated with rapid expansion and integration of new businesses.

The stock repurchase option indicates management's belief in the company's undervaluation, which could support stock prices. Overall, this financial maneuver positions Shift4 for potential accelerated growth in the competitive payments landscape, but success will depend on effective capital allocation and market execution.

Legal Expert

The private offering of Shift4's senior notes raises some legal considerations. By conducting the offering under Rule 144A and Regulation S, Shift4 avoids the more stringent registration requirements of a public offering. This approach offers greater flexibility and speed but limits the potential investor base to qualified institutional buyers and non-U.S. persons.

The company's disclaimer regarding offer and solicitation is a standard legal protection, emphasizing compliance with securities laws. However, investors should note that these unregistered securities may have liquidity in the secondary market.

The joint and several guarantees by certain subsidiaries add a layer of security for noteholders but also create potential legal complexities in the event of default. Investors should carefully review the offering memorandum to understand the full scope of these guarantees and any associated risks.

CENTER VALLEY, Pa.--(BUSINESS WIRE)-- Shift4 Payments, Inc. (NYSE: FOUR), a leader in integrated payments and commerce technology, today announced the completion of the previously announced offering of $1,100.0 million aggregate principal amount of 6.750% senior notes due 2032 (the “Notes”) by Shift4 Payments, LLC (“Shift4”) and Shift4 Payments Finance Sub, Inc., subsidiaries of Shift4 Payments, Inc. The Notes are guaranteed, jointly and severally, on a senior unsecured basis, by certain of Shift4’s subsidiaries.

Shift4 intends to use the net proceeds of the offering for general corporate purposes, which includes working capital, acquisitions, retirement of debt, repurchases of common stock and other business opportunities. Shift4 currently expects to retain certain of the net proceeds to repay outstanding borrowings under Shift4 Payments, Inc.’s $690.0 million of outstanding 0.00% Convertible Senior Notes due 2025 Notes (the “2025 Notes”) and/or Shift4’s $450.0 million of outstanding 4.625% Senior Notes due 2026 (the “2026 Notes”).

The Notes were offered in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes were offered within the United States to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A and outside the United States in accordance with Regulation S under the Securities Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers of the Notes were made only by means of a private offering memorandum.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Shift4 intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our intention to repay outstanding borrowings under the 2025 Notes and/or the 2026 Notes.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any futures results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the substantial and increasingly intense competition worldwide in the financial services, payments and payment technology industries; potential changes in the competitive landscape, including disintermediation from other participants in the payments chain; the effect of global economic, political and other conditions on trends in consumer, business and government spending; fluctuations in inflation; our ability to anticipate and respond to changing industry trends and the needs and preferences of our merchants and consumers; our reliance on third-party vendors to provide products and services; risks associated with acquisitions; our inability to protect our IT systems and confidential information, as well as the IT systems of third parties we rely on, from continually evolving cybersecurity risks, security breaches and/or other technological risks; compliance with governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, marketing, cryptocurrency, and consumer protection laws across different markets where we conduct our business; our ability to continue to expand our share of the existing payment processing markets or expand into new markets; additional risks associated with our expansion into international operations, including compliance with and changes in foreign governmental policies, as well as exposure to foreign exchange rates; our ability to integrate and interoperate our services and products with a variety of operating systems, software, devices, and web browsers; our dependence, in part, on our merchant and software partner relationships and strategic partnerships with various institutions to operate and grow our business; and the significant influence Jared Isaacman, our CEO and founder, has over us, including control over decisions that require the approval of stockholders. These and other important factors discussed under the caption “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023 and in Part II, Item 1A. in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release.

Any such forward-looking statements represent management’s expectations as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

About Shift4 Payments:

Shift4 Payments (NYSE: FOUR) is boldly redefining commerce by simplifying complex payments ecosystems across the world. As the leader in commerce-enabling technology, Shift4 powers billions of transactions annually for hundreds of thousands of businesses in virtually every industry. For more information, visit shift4.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240815294604/en/

Investor Relations:

Thomas McCrohan

484.735.0779

investors@shift4.com



Paloma Main

484.954.5768

investors@shift4.com



Media Contacts:

Nate Hirshberg

Senior Vice President, Marketing

Shift4 Payments

888.276.2108 x1107

nhirshberg@shift4.com

Source: Shift4 Payments, Inc.

FAQ

What is the interest rate and maturity of Shift4's new senior notes offering (FOUR)?

Shift4 Payments (NYSE: FOUR) issued $1,100.0 million of 6.750% senior notes due 2032.

How does Shift4 (FOUR) plan to use the proceeds from its recent senior notes offering?

Shift4 plans to use the proceeds for general corporate purposes, including working capital, acquisitions, debt retirement, stock repurchases, and other business opportunities. They specifically intend to repay outstanding borrowings from their 2025 and/or 2026 notes.

What existing debt does Shift4 (FOUR) plan to repay with the new senior notes proceeds?

Shift4 plans to repay part of their $690.0 million of 0.00% Convertible Senior Notes due 2025 and/or $450.0 million of 4.625% Senior Notes due 2026.

Who were the primary buyers of Shift4's (FOUR) new senior notes offering?

The notes were offered privately to qualified institutional buyers in the U.S. under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act of 1933.