Form 4: Accel-KKR Funds Distribute Paymentus Holdings Shares

Accel-KKR entities have completed an in-kind pro rata distribution of Paymentus Holdings Class B Common Stock to their partners without consideration.

Summary

• Accel-KKR entities, including Accel-KKR Holdings GP, LLC, reported an in-kind pro rata distribution of Paymentus Holdings, Inc. (PAY) Class B Common Stock to their partners.
• The distributions were made without consideration, meaning no cash payment was involved.
• Class B Common Stock is convertible at any time into an equal number of Class A Common Stock and has no expiration date.
• Specific Accel-KKR funds that disposed of Class B shares include: Accel-KKR Capital Partners CV III, LP (3,602,968 shares), Accel-KKR Members Fund, LLC (180,352 shares), Accel-KKR Growth Capital Partners III, LP (151,676 shares), Accel-KKR Growth Capital Partners II Strategic Fund, LP (5,084 shares), and Accel-KKR Growth Capital Partners II, LP (59,920 shares).
• Following these distributions, other Accel-KKR entities, such as AKKR Strategic Capital LP and AKKR SC GPI HoldCo LP, reported increased indirect beneficial ownership of Class A Common Stock, reflecting shares received in this distribution (321,251 shares and 64,034 shares, respectively).
• Accel-KKR Holdings GP, LLC, controlled by Mr. Palumbo and Mr. Barnds, maintains voting and investment power over the shares owned by the various Accel-KKR funds.

Sentiment

Score: 5

Explanation: The filing reports an in-kind distribution of shares by a significant owner, Accel-KKR, to its partners. This is a structural change in beneficial ownership rather than a direct positive or negative operational event for Paymentus Holdings. While it could lead to future selling pressure, the immediate impact on the company's fundamentals is neutral.

Positives

• The distribution was 'without consideration,' meaning the partners received shares without having to pay for them.
• The Class B Common Stock is convertible into Class A Common Stock, providing liquidity potential for the recipients.

Negatives

• The distribution itself is a neutral event for Paymentus Holdings, but it could lead to increased selling pressure if partners decide to liquidate their newly received shares in the open market.

Risks

• Potential for increased selling pressure on Paymentus Holdings Class A Common Stock if the partners who received the distributed shares decide to sell them.
• Changes in the beneficial ownership structure could impact future governance dynamics, although Accel-KKR Holdings GP, LLC retains significant control over the underlying shares.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• The filing details an in-kind pro rata distribution of Paymentus Holdings Class B Common Stock from several Accel-KKR investment funds to their respective partners, including other Accel-KKR entities. This represents an internal restructuring of beneficial ownership within the broader Accel-KKR group without consideration.

Stakeholder Impact

• Shareholders: Potential for increased float and selling pressure if distributed shares are subsequently sold by the recipients.
• Accel-KKR Partners: Received shares without consideration, potentially increasing their individual holdings in Paymentus.
• Accel-KKR Funds: Reduced direct beneficial ownership in Paymentus, but Accel-KKR Holdings GP, LLC retains voting and investment power over the underlying shares.

Next Steps

• Partners who received the distributed shares may decide to sell them, potentially impacting market liquidity and share price.
• Mr. Palumbo and Mr. Barnds have separately filed Form 4s, which would provide further details on their individual interests.

Key Dates

Keywords

Paymentus Holdings, PAY, Accel-KKR, Form 4, insider transaction, beneficial ownership, Class B Common Stock, Class A Common Stock, equity distribution, private equity, investment fund