AvidXchange Weighs Sale Amid Turbulent Market Conditions

Is AP automation solution provider AvidXchange for sale? Bloomberg reports that the firm, specializing in bill payment and receipt solutions for midsize businesses, is exploring a potential sale after receiving takeover interest from several suitors, according to sources familiar with the matter.

The Charlotte, North Carolina-based company has enlisted the services of Financial Technology Partners to consider its options following recent approaches by potential buyers, including private equity firms. However, no final decision has been made, and AvidXchange might choose not to proceed with a sale, particularly given the current volatility in equity markets.

The ongoing discussions come as AvidXchange’s stock has faced significant challenges, plummeting 36% this year before experiencing a recent uptick. On Thursday, the company’s shares surged 14% to close at $7.84 in New York trading, valuing the company at approximately $1.6 billion. This marks a substantial decline from its initial public offering price of $25 per share in 2021.

Avid’s most recent financials were announced Feb. 26. They showed improved financial results for the fourth quarter and full year of 2024. The company achieved a significant increase in revenue, with total revenue rising 10.9% year-over-year to $115.4 million in the fourth quarter. This growth was accompanied by a notable improvement in profitability, with GAAP net income reaching $4.7 million, compared to a net loss of $4.5 million in the same period last year.

AvidXchange also substantially reduced its debt and the repurchase of $50 million in common stock. The company’s cash and marketable securities stood at $389.3 million, with long-term debt reduced to $9.1 million by year-end. Non-GAAP gross margin expanded to 74.9%, reflecting the company’s focus on operational efficiency.

Despite macroeconomic headwinds, the company said it was “optimistic “about its growth prospects, driven by strategic partnerships and the adoption of new products like Payment Accelerator 2.0 and Pay 2.0. The company projects continued margin expansion in 2025, although revenue growth may be tempered by broader economic conditions.

Representatives from both AvidXchange and Financial Technology Partners have declined to comment on the matter. The potential sale highlights the strategic challenges faced by FinTech companies navigating uncertain market conditions while seeking growth opportunities through.