DEFA14A: AvidXchange to be Acquired by TPG in Partnership with Corpay for $2.2 Billion

AvidXchange Holdings, Inc. will be acquired by TPG in partnership with Corpay for $10.00 per share in cash, valuing the company at $2.2 billion.

Summary

• AvidXchange Holdings, Inc. has entered into a definitive agreement to be acquired by TPG in partnership with Corpay.
• The acquisition values AvidXchange at $2.2 billion, with stockholders receiving $10.00 per share in cash.
• TPG will acquire a majority interest through TPG Capital, while Corpay will acquire a minority interest.
• The purchase price represents a 22% premium over the closing price on May 6, 2025, 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 as of March 12, 2025.
• The transaction was unanimously approved by the independent members of the Board of Directors of AvidXchange.
• The deal is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including stockholder and regulatory approvals.
• AvidXchange has canceled its first quarter 2025 earnings conference call due to the announced transaction.

Sentiment

Score: 8

Explanation: The sentiment is positive due to the acquisition at a premium, providing value to shareholders and positioning the company for future growth as a private entity with the backing of TPG and Corpay.

Positives

• The acquisition provides significant value to AvidXchange stockholders with a $10.00 per share cash offer.
• The company will become private, allowing for more flexibility to invest in growth.
• TPG and Corpay bring resources and long-term focus to scale the platform.
• The transaction was unanimously approved by the independent members of the Board of Directors of AvidXchange.

Negatives

• AvidXchange has canceled its first quarter 2025 earnings conference call.

Risks

• The transaction is subject to customary closing conditions, including receipt of AvidXchange stockholder approval and required regulatory approvals.
• There is a risk that the Companys stockholders may not approve the Transaction.
• The transaction could be delayed or terminated due to governmental or regulatory disapproval.
• Litigation relating to the transaction could arise.
• The transaction and its announcement could have an adverse effect on the ability of the Company to retain buyers and retain and hire key personnel and maintain relationships with buyers, suppliers, employees, stockholders and other business relationships and on the Company's operating results and business generally.
• The transaction and its announcement could have adverse effects on the market price of the Company's common stock.
• Restrictions on the Company's conduct during the pendency of the Transaction may impact the Company's ability to pursue certain business opportunities.

Future Outlook

Upon completion of the transaction, AvidXchange will become a private company with additional flexibility to continue investing in growth and delivering integrated payment solutions.

Management Comments

• Michael Praeger, CEO of AvidXchange, stated that the agreement delivers significant value for stockholders and positions the business for long-term growth.
• John Flynn, Partner at TPG, noted the large opportunity for businesses to improve their accounts payable processes through automation.
• Tim Millikin, Partner at TPG, sees significant opportunity for AvidXchange as a private company to continue enhancing its solutions.
• Ron Clarke, Chairman and CEO of Corpay, expressed excitement about the company's future prospects and the complementary nature of AvidXchange's solutions to Corpay's business.

Industry Context

The acquisition reflects the ongoing trend of consolidation and private equity investment in the accounts payable automation and corporate payments space, highlighting the increasing importance of digital payment solutions for businesses.

Comparison to Industry Standards

• Corpay (NYSE: CPAY) is a global S&P 500 provider of commercial cards and AP automation solutions, indicating AvidXchange will be joining a large and established player in the corporate payments industry.
• TPG's investment aligns with other private equity firms recognizing the growth potential in AP automation, similar to Thoma Bravo's acquisition of Bottomline Technologies.
• The 22% premium over the closing price is within the typical range for acquisitions in the software industry, but the 45% premium over the price before deal rumors suggests a competitive bidding process or strong strategic rationale.

Stakeholder Impact

• Shareholders will receive a cash payment of $10.00 per share.
• Customers may benefit from increased investment in innovation and solutions.
• Employees may experience changes as the company transitions to private ownership.
• Suppliers may see continued integration with AvidXchange's platform.

Next Steps

• AvidXchange stockholders will need to vote on the transaction at a special meeting.
• The transaction is subject to regulatory approvals.
• The companies will work towards closing the transaction in the fourth quarter of 2025.

Key Dates

Keywords

AvidXchange, TPG, Corpay, acquisition, merger, AP automation, accounts payable, private equity, corporate payments