Payfare (PAY.TO) has a Neutral rating and C$4 price target at B. Riley Securities said in a Tuesday note that notes Fiserv's move to buy Payfare for C$4 per share.

With DoorDash still on the Payfare platform today, B. Riley estimates that Fiserv is buying Payfare for approximately 4.5x 2025 EBITDA using its estimates post-second quarter, which was before the loss of the DoorDash business.

Fiserv agreed to acquire Payfare for about C$201.5 million (US$140 million) in total. B. Riley believes this deal is a "solid" tuck-in acquisition that increases FI's exposure in the emerging sectors of gig economy worker instant payments and earned wage access (EWA) for hourly employees. It believes the deal will add nearly 1 percentage point of revenue growth and be accretive to earnings in the first year for FI.

B. Riley noted Payfare is also pursuing three quite large contracts. It was previously disclosed that landing any two of the three RFPs could have the revenue potential of DoorDash. B. Riley believes the probability of winning these RFPs is increased with Payfare under the umbrella of FI.

Payfare's share price was up 1.3% at last look to $3.85 on the TSX.