iPayment Holdings, Inc. And iPayment, Inc. Announce Closing Of Exchange And Tender Offer

iPayment, Inc. (the “Company”), a trusted provider of payment and processing solutions for small and medium-sized businesses (SMBs), and its parent, iPayment Holdings, Inc. (“Holdings” and, together with the Company, “iPayment”), recently announced the results of the previously announced exchange offer relating to its 9.50% Senior Secured Notes due 2019 (the “9.50% Notes”) along with its previously announced tender offer relating to Holdings’ common stock (the “Common Stock”), as part of a comprehensive refinancing of iPayment. The exchange offer and tender offer commenced on February 15, 2017, and expired at 5:00 p.m. Eastern time, on April 7, 2017. The refinancing has substantially deleveraged the Company, and will enable the Company to materially expand its services, product offerings, and channel partnerships.

“This comprehensive refinancing represents a critical milestone for iPayment,” said OB Rawls IV, Chief Executive Officer, iPayment, Inc. “We are now positioned for short- and long-term growth across all of our sales channels and we are prepared to capitalize on the new opportunities in and around the payments space. We view this as the next chapter for the Company and our entire organization is excited about the opportunities that lie ahead.”

“The completion of the exchange offer and refinancing is a tremendous accomplishment and a catalyst for accelerated growth for the Company,” noted Robert Purcell, Chief Financial Officer, iPayment, Inc. “We are now in a position to make strategic investments in new business partnerships, technology enhancements and infrastructure to drive incremental value and revenues for our organization and our partners.”

MacKenzie Partners, Inc., acting as Information and Exchange Agent for the exchange offer and Depositary and Information Agent for the tender offer, advised the Company that $280,371,408 of the $296,064,786 aggregate principal amount of the 9.50% Notes have been validly tendered for exchange, representing 94.7% of the principal amount of the outstanding 9.50% Notes and that 13,294,368 of the 27,465,846 outstanding shares of Common Stock have been validly tendered, representing 48.4% of the outstanding shares of Common Stock.

In accordance with the terms of the exchange offer and the tender offer, iPayment accepted all of the 9.50% Notes and shares of Common Stock validly tendered and not withdrawn. All holders of 9.50% Notes accepted for exchange will receive approximately $142.67 in cash, 932 shares of common stock, and 5.97 shares of preferred stock per $1,000 principal amount of 9.50% Notes tendered. In addition to the cash and shares of Common Stock and preferred stock, all holders of such 9.50% Notes accepted for exchange will also receive a cash payment of approximately $30.61 per $1,000 principal amount of 9.50% Notes tendered of accrued and unpaid interest from the last interest payment date on the 9.50% Notes to, but not including, April 11, 2017. Holders of 9.50% Notes tendered prior to 5:00 p.m. New York City time, on March 20, 2017 and accepted for exchange will also receive an early tender fee of approximately $3.57 in cash, per $1,000 principal amount of 9.50% Notes tendered.

As part of the refinancing, the Company entered into a First Lien Credit Facility consisting of a $330M Term Loan Facility and a $20M Revolving Loan Facility and issued $175M principal amount 10.75% Second Lien Senior Secured Notes due 2024.

In connection with the refinancing, the Company obtained stockholder approval to amend Holding’s charter and noteholder approval to amend the indenture related to the 9.50% Notes.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the 9.5% Notes, Common Stock, or any other security and shall not constitute an offer, solicitation, or sale in any state or jurisdiction in which, or to any persons to whom, such an offer, solicitation, or sale would be unlawful. The exchange offer was made only pursuant to the Offer to Exchange and Consent Solicitation Statement, dated February 15, 2017, as supplemented, and the related letter of transmittal and the tender offer was made only pursuant to the Offer to Purchase, dated February 15, 2017, as supplemented, and the related letter of transmittal and only to such persons and in such jurisdictions as is permitted under applicable law.

About iPayment
iPayment is a trusted provider of payment processing solutions in the U.S. With over 18 years of experience and more than 140,000 SMB customers, the company is consistently recognized for its depth of payments experience, breadth of product offerings, and commitment to transparency and SMB support. From new product innovation to customer service satisfaction, iPayment is an organization focused on small business enablement and delivering relevant and impactful services and solutions that help partners and SMB customers grow their individual businesses. For more information, visit http://www.ipaymentinc.com.