Billtrust, a company specializing in automating the invoice-to-cash process, has announced that it has agreed to be acquired by EQT, a Sweden-based private equity firm, for $1.7 billion in an all-cash deal. This transaction is expected to close in Q1 2023, subject to the approval of Billtrust’s shareholders and regulators.
Transaction Details
Shareholders will receive $9.50 per share in cash upon Billtrust’s transition to a private company, representing a 64% premium above the September 27 closing price of $5.77. The company’s stock has remained relatively stable in recent years, hitting a high of around $19 a share in February 2021 before bottoming out at $4.51 in June.
Billtrust’s History and Growth
Founded in 2001 as a five-person company by Flint Lane, a former Accenture staffer, Billtrust has quickly grown to offer software-as-a-service (SaaS) products for managing billing for companies, including electronic billing and payments for consumer and business billing services. Prior to going public through a SPAC merger in 2020, Billtrust made nine acquisitions – most recently of Order2Cash, a cash processes management platform – and raised over $100 million in venture capital.
At one point in time, its customers included a number of newspaper groups, which used Billtrust to power online billing for subscriptions. "This transaction marks the beginning of an exciting new chapter for Billtrust, our customers, and employees while providing shareholders an immediate and substantial cash value with a compelling premium," Lane said in a statement.
"We believe business-to-business payments and accounts receivable continue to be ripe for massive disruption and innovation, and our partnership with EQT will provide us with greater resources and flexibility to build on our leadership position."
Competitor Landscape
No shortage of vendors compete for business in the accounts receivable and payments cycle management space. Some notable competitors include Upflow, Tipalti, HighRadius, Rimilia, Hanse Orga, Quadient-owned YayPay, which offer SaaS products focused on collecting money from outstanding invoices.
Other startups aim to simplify collections more broadly, while Churpy helps enterprises mainly in Africa reconcile and handle their payments. A major challenge for Billtrust and its competitors is convincing companies that they need the software – a hurdle in any industry, but particularly finance, where teams are likely to perceive their processes as sufficiently modern.
Billtrust’s own research has found that, while 86% of accounts receivable teams rate their department as ‘very’ or ‘somewhat’ modernized, 40% don’t offer self-service capabilities, and over 60% haven’t digitized a majority of their invoices.
Market Opportunity
Despite these challenges, the market opportunity for Billtrust and its competitors remains significant. According to a report by Grand View Research, the global accounts receivable automation market is expected to grow at a compound annual growth rate (CAGR) of 12.8% from 2020 to 2027.
EQT’s Acquisition Strategy
This acquisition marks EQT’s latest move in its strategy to invest in companies that are transforming industries through digitalization and innovation. "We believe Billtrust has the potential to become a leading player in the accounts receivable automation market, and we’re excited to partner with Flint and his team to drive growth and expansion," said Robert van de Weg, Partner at EQT Partners.
Implications for Billtrust’s Customers
The acquisition is expected to have a positive impact on Billtrust’s customers, who will benefit from the company’s continued investment in innovation and its expanded resources. "We’re committed to delivering the highest level of service and support to our customers, and we believe this partnership with EQT will enable us to take our business to the next level," said Lane.
Conclusion
The acquisition of Billtrust by EQT marks a significant milestone in the company’s history and underscores its potential for growth and expansion. As the accounts receivable automation market continues to grow, Billtrust is well-positioned to capitalize on this trend with its innovative products and services.
