In a major acquisition that promises to reshape the future of finance Paylocity, the enterprise spend management software company, has agreed to buy startup Airbase for $325 million. The deal between the HR platform leader and the fast-growing financial services provider means expanded opportunities at the intersection of human resources and finance operations.
Subject to regulatory approval, the all-cash transaction is expected to close within the next two months. Paylocity plans to finance the purchase through existing credit lines. For Airbase, the acquisition marks a successful exit after years of steady growth serving mid-market businesses.
Founded in 2017, Airbase built an integrated platform to streamline corporate spending. Features included bill pay, expense management, and reimbursement functions. With its software, the San Francisco-based company helped finance teams gain visibility and control over budgets. After raising more than $100 million, Airbase reached a lofty valuation but saw the potential for greater impact by partnering with Paylocity.
Chicago-based Paylocity has built a vast customer base of more than 40,000 organizations using its human capital management software. As a publicly traded company valued at nearly $9 billion, Paylocity has the resources to take Airbase’s solutions to new heights. Company leaders see the deal as an opportunity to expand their total addressable market by providing unified HR and financial management tools to mid-sized businesses.
Industry analysts view the acquisition positively, believing the combined company will better serve clients operating at the intersection of HR and financial services. Both companies have established a strong reputation for supporting mid-market clients and together are well positioned to streamline workplace processes. With more than 300 employees already, Airbase is expected to significantly contribute to Paylocity’s innovation and service capabilities.
Details on how many Airbase employees could join Paylocity were not disclosed. However, the transaction structure provides compensation for shareholders, employees and the balance sheet. Overall, the deal underscores the continued importance of combining forces to bring powerful new software offerings to business customers.