Form 4: Paymentus Holdings Director and 10% Owner Thomas Barnds Reports Future Accel-KKR Stock Distributions

Paymentus Holdings, Inc. Director and 10% Owner Thomas Barnds has filed a Form 4 disclosing future changes in his beneficial ownership of Class B Common Stock, stemming from in-kind pro rata distributions from various Accel-KKR investment funds.

Summary

• Thomas Barnds, a Director and 10% owner of Paymentus Holdings, Inc. (PAY), filed a Form 4 to report future changes in his beneficial ownership of the company's Class B Common Stock, effective June 2, 2025.
• The reported transactions primarily involve in-kind pro rata distributions of Class B Common Stock from several Accel-KKR investment funds to their partners, without consideration.
• Class B Common Stock is convertible at any time into an equal number of shares of Class A Common Stock on a one-for-one basis and has no expiration date.
• Specifically, Accel-KKR Capital Partners CV III, LP disposed of 3,602,968 shares, Accel-KKR Members Fund, LLC disposed of 180,352 shares, Accel-KKR Growth Capital Partners III, LP disposed of 151,676 shares, Accel-KKR Growth Capital Partners II Strategic Fund, LP disposed of 5,084 shares, and Accel-KKR Growth Capital Partners II, LP disposed of 59,920 shares.
• Following these distributions, the Accel-KKR entities' indirect beneficial ownership of Class B Common Stock is reported as: Accel-KKR Capital Partners CV III, LP (43,013,093 shares), Accel-KKR Members Fund, LLC (2,265,518 shares), Accel-KKR Growth Capital Partners III, LP (1,810,743 shares), Accel-KKR Growth Capital Partners II Strategic Fund, LP (60,688 shares), Accel-KKR Growth Capital Partners II, LP (715,345 shares), AKKR Strategic Capital LP (3,455,193 shares, including 321,167 shares received in distributions), and AKKR SC GPI HoldCo LP (440,351 shares, including 64,539 shares received in distributions).
• Thomas Barnds' direct beneficial ownership is 43 shares, and his indirect beneficial ownership through the Barnds Living Trust is 3,706,145 shares, which includes 461,914 shares received in distributions.
• Mr. Barnds, along with Mr. Palumbo, controls Accel-KKR Holdings GP, LLC, which holds voting and investment power over the shares of Common Stock owned by the various Accel-KKR funds.

Sentiment

Score: 5

Explanation: The document is a standard regulatory filing (Form 4) disclosing changes in beneficial ownership due to an in-kind distribution from private equity funds. It does not contain information that would inherently suggest a positive or negative sentiment regarding the company's performance or prospects. It's a procedural re-allocation of shares.

Positives

• The distributions are 'without consideration,' meaning no cash was exchanged for the shares, which is typical for internal fund distributions.
• The Class B Common Stock is convertible 1:1 into Class A Common Stock, providing liquidity potential for the underlying shares.

Future Outlook

N/A

Industry Context

This filing reflects a common practice in private equity, where funds distribute portfolio company shares to their limited partners as part of their exit strategy or fund winding-down process. Accel-KKR, a prominent technology-focused private equity firm, is distributing shares of Paymentus Holdings, a company in the digital bill payment industry, to its investors. This is a routine event for private equity-backed companies once they go public.

Comparison to Industry Standards

• In-kind distributions are a standard mechanism for private equity firms like Accel-KKR to return value to their limited partners, especially for publicly traded portfolio companies where direct share sales might impact market price or require more complex structuring.
• The 1:1 convertibility of Class B to Class A Common Stock is a common dual-class share structure feature, often used to maintain control for founders or early investors while allowing for public trading of Class A shares, similar to structures seen in companies like Alphabet (Google) or Meta (Facebook).

Corporate Governance

Related Party Transactions

• The in-kind pro rata distributions of Paymentus Holdings Class B Common Stock from various Accel-KKR investment funds to their partners, including Thomas Barnds, are considered related party transactions. This is because Mr. Barnds is a Director and 10% owner of Paymentus Holdings, and he, along with Mr. Palumbo, controls Accel-KKR Holdings GP, LLC, which has voting and investment power over the shares held by these Accel-KKR funds. The distributions are made without consideration.

Stakeholder Impact

• Shareholders: The re-allocation of shares through in-kind distributions clarifies the beneficial ownership structure, particularly for a significant 10% owner and director. It does not directly dilute existing public shareholders as it's a distribution of existing shares, not new issuance.
• Accel-KKR Limited Partners: These distributions represent a return of capital or assets to the limited partners of the Accel-KKR funds.

Next Steps

• The reported transaction is scheduled to occur on June 2, 2025.
• Other related entities and Mr. Palumbo have separately filed Form 4s reporting their interests, indicating ongoing compliance with reporting requirements.

Key Dates

Keywords

Paymentus Holdings, PAY, SEC Form 4, insider transaction, beneficial ownership, stock distribution, Accel-KKR, Class B Common Stock, Class A Common Stock, Thomas Barnds, corporate governance, private equity distribution