DEFA14A: AvidXchange to be Acquired by TPG in Partnership with Corpay, Going Private

AvidXchange Holdings, Inc. has entered into a definitive agreement to be acquired by TPG in partnership with Corpay, transitioning the company to private ownership.

Summary

• AvidXchange has announced a definitive agreement to be acquired by TPG, a global alternative asset management firm, in partnership with Corpay, a global leader in corporate payments.
• Upon completion of the transaction, AvidXchange will become a private company.
• The company believes that operating as a private entity will allow it to prioritize long-term growth and strategic investments, fostering innovation and benefiting both employees and customers.
• The transaction is expected to close in the fourth quarter of 2025, pending customary closing conditions and regulatory approvals.
• In 2024, AvidXchange processed more than 79 million transactions and generated annual revenue exceeding $425 million.

Sentiment

Score: 8

Explanation: The document conveys a positive outlook regarding the acquisition, emphasizing growth opportunities and strategic benefits. The tone is optimistic, highlighting the strengths of the partnership and the potential for future success.

Positives

• The acquisition by TPG and Corpay is expected to accelerate AvidXchange's growth.
• Going private will allow AvidXchange to focus on long-term strategic investments.
• The partnership with TPG and Corpay is expected to bring business-building experience and industry expertise.
• The company believes this partnership strengthens its course and positions it for faster growth.

Negatives

• The transaction is subject to customary closing conditions and regulatory approvals, which could potentially delay or prevent the acquisition.
• The announcement of the transaction could have an adverse effect on the company's ability to retain buyers and key personnel.
• The announcement of the transaction could have adverse effects on the market price of the company's common stock.

Risks

• The timing, receipt, and terms of required governmental and regulatory approvals could reduce anticipated benefits or cause the parties to abandon the transaction.
• The company's stockholders may not approve the transaction.
• Litigation relating to the transaction could arise.
• The transaction could negatively impact the company's ability to retain buyers and key personnel.
• Restrictions on the company's conduct during the pendency of the transaction may impact its ability to pursue certain business opportunities.
• The transaction may be more expensive to complete than anticipated.
• The company's stock price may decline significantly if the transaction is not consummated.
• Cybersecurity threats and incidents pose a risk to the company.
• Legislative, regulatory, and economic developments could affect the company's business.
• General economic and market conditions, including federal monetary policy and interest rates, could impact the company.

Future Outlook

The company anticipates accelerated growth as a private entity under the ownership of TPG and in partnership with Corpay, with a focus on long-term strategic investments and innovation.

Management Comments

• Michael Praeger, CEO, stated that the acquisition comes at an important moment in AvidXchange's history as they celebrate their 25th anniversary.
• Praeger believes that AvidXchange is best positioned to accelerate its growth as a private company.
• Praeger expressed confidence that TPG shares AvidXchange's strong focus on culture and innovation-led growth.
• Praeger believes the partnership does not change their course but strengthens it.

Industry Context

The acquisition reflects the ongoing trend of consolidation and private equity investment in the B2B payments and AP automation space, as companies seek to enhance their market position and accelerate growth through strategic partnerships and access to capital.

Comparison to Industry Standards

• Corpay (formerly Comdata) is a large player in the corporate payments space, similar in scale to Fleetcor and WEX.
• TPG's investment aligns with other private equity firms investing in fintech companies like Thoma Bravo's acquisition of Bottomline Technologies.
• AvidXchange's revenue of $425 million places it among the mid-sized players in the B2B payments market, smaller than giants like Visa and Mastercard but larger than many niche providers.

Stakeholder Impact

• Shareholders will have the opportunity to vote on the proposed transaction.
• Employees are assured that the partnership does not change the company's course but strengthens it.
• Customers are expected to benefit from increased innovation and improved service.
• The company believes the partnership will help take AvidXchange to its next level.

Next Steps

• The Company will submit the Transaction to the Company's stockholders for their consideration and approval at a special meeting of the Company's stockholders.
• The Company expects to file with the Securities and Exchange Commission (the SEC) a proxy statement on Schedule 14A (the Proxy Statement).
• The Company, affiliates of the Company and affiliates of Parent intend to jointly file a transaction statement on Schedule 13E-3 (the Schedule 13E-3) with the SEC.

Key Dates

Keywords

acquisition, AvidXchange, TPG, Corpay, B2B payments, AP automation, private company, merger