Charlotte-based AvidXchange will be acquired by TPG, a Fort Worth, Texas-based global alternative asset management firm in partnership with Corpay, a leader in corporate payments. TPG and Corpay will acquire AvidXchange for $10 per share in a cash transaction that values the accounts payable automation software provider at $2.2 billion.
AvidXchange was founded in 2000 after launching in a Charlotte coffee shop with five employees and has been recognized as one of the fastest-growing companies in the country. As of Dec. 31, it had more than 1,600 employees who earned a median annual salary of more than $104,000. It also has offices in Alabama, Massachusetts, Texas and Utah.
AvidXchange shares closed Tuesday at $8.20, although shares were more than $9.70 in after-hours trading after the deal was announced. TPG will acquire a majority interest in AvidXchange through TPG Capital, the firm’s U.S. and European private equity platform. Corpay will acquire a minority interest in the company.
The purchase price represents a 22% premium over AvidXchange’s closing price Tuesday, a 16% premium over the 90-day volume weighted average price as of the same date, and a 45% premium over the $6.89 closing price on March 12, the last trading day before media reports of a potential transaction involving the company, according to a release.
Upon completion of the transaction, AvidXchange will become a private company with flexibility to continue investing in growth and delivering integrated payment solutions that enable greater efficiency, visibility and control for customers, according to a release.
“We are pleased to have reached an agreement that delivers significant value for AvidXchange stockholders and positions our business for long-term growth and success for our valued customers,” said Michael Praeger, CEO of AvidXchange. “Over the last 25 years, AvidXchange has established itself as a leader in AP automation and payment software by building a differentiated platform primed for growth. With TPG and Corpay, we will have the resources and long-term focus to scale our platform and provide more innovative solutions that help our customers across the country transform their accounts payable processes.”
“There is a very large opportunity for businesses to improve their accounts payable processes through automation and become more efficient, more secure, and more accurate,” said John Flynn, Partner at TPG. “AvidXchange is addressing this need, providing a differentiated payment network and end-to-end tools that integrate seamlessly into workflows, enabling strong connectivity between businesses and their suppliers. We are thrilled to partner with Michael Praeger and the AvidXchange team, as well as Ron Clarke and the Corpay team, to support and accelerate the growth of the platform.”
Certain members of the AvidXchange senior management team have agreed to rollover a significant portion of their equity in support of the transaction. The transaction was unanimously approved by the independent members of the Board of Directors of AvidXchange.
Advisors
Financial Technology Partners and Barclays are serving as financial advisers to AvidXchange. Latham & Watkins is serving as its legal adviser.
J.P. Morgan Securities, Moelis & Company and RBC Capital Markets acted as financial advisers to TPG, and Davis Polk & Wardwell and Schulte Roth & Zabel acted as legal counsel to TPG.
Goldman Sachs acted as financial adviser to Corpay, and Eversheds Sutherland acted as legal counsel to Corpay.
AvidXchange digitizes and automates the accounts payable workflows for more than 8,500 businesses, and it has made payments to more than 1.35 million supplier customers of its buyers over the past five years.