EQT acquires Billtrust, a company automating the invoice-to-cash process, for $1.7B

Billtrust, a company developing a platform to automate the invoice-to-cash process, today announced that it agreed to be acquired by EQT, the Sweden-based private equity firm, for $1.7 billion in an all-cash deal. Approved by Billtrust’s board of directors, the transaction is expected to close in Q1 2023 subject to the green light from Billtrust’s shareholders and regulators.

Shareholders will receive $9.50 per share in cash upon Billtrust’s transition to a private company, a 64% premium above the September 27 closing price of $5.77. The company’s stock has remained relatively steady in recent years, hitting a high of around $19 a share in February 2021 before bottoming out at $4.51 in June.

Billtrust, headquartered in New Jersey, was founded in 2001 as a five-person company by Flint Lane, a former Accenture staffer. It quickly grew to offer software-as-a-service (SaaS) products to manage 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.”

It’s worth noting that no shortage of vendors compete for business in the accounts receivable and payments cycle management space. There’s UpflowTipalti, HighRadius, Rimilia, Hanse Orga and Quadient-owned YayPay, which offer SaaS products focused on collecting money from outstanding invoices. Yaydoo and Tesorio aim to simplify collections more broadly. Another startup, 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. It’s 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 while over 60% haven’t digitized a majority of their invoices.

But the opportunity is enormous. According to a report from business intelligence firm Axiom Groupe, the market for invoice-to-cash alone could reach $3 billion by 2024, growing at a compound annual interest rate of 12.1% from 2019.

For EQT, which has around $100 billion in assets under management, the acquisition represents the latest in a string of diverse megadeals. In July, the firm announced plans to purchase solar and storage developer Cypress Creek Renewables reportedly for around $2 billion. A year earlier, EQT snatched up Spanish real estate internet portal Idealista for €1.3 billion (~$1.24 billion).

Of the Billtrust acquisition, EQT global tech sector team partner Arvindh Kumar said in a press release: “The Billtrust platform features modern solutions, a compelling value proposition, and, like EQT, a commitment to innovation and transformation in the digital era. Additionally, the company operates at the intersection of software, fintech, and payments — sectors in which EQT has deep familiarity and a track record of success.”