Paylocity, a provider of cloud-based HR and payroll software, has reached an agreement to acquire Airbase Inc., a spend management software company based in San Francisco, for approximately $325 million (all figures U.S.)
The acquisition is set to expand Paylocity’s offerings into the finance realm, targeting the Office of the CFO and streamlining business-related expenses on a single platform.
Airbase’s software, which automates tasks such as bill payments, expense management, and procurement, is used by companies with between 100 and 5,000 employees. The firm has more than 500 clients and operates across the U.S., Canada, India, and the Philippines.
Toby Williams, president and CEO of Paylocity, described the acquisition as a move that will enhance the company’s ability to serve its nearly 40,000 clients by providing a unified platform for both HR and financial operations.
“We believe this acquisition will allow us to provide companies with an integrated software platform to manage all aspects of their operational spend,” Williams said. “Many companies use disparate software solutions or manual processes to manage their labour and procurement costs. We expect this acquisition will give us the ability to provide a comprehensive solution and modern client experience.”
The acquisition is expected to close in the first or second quarter of fiscal 2025, subject to regulatory approval. Paylocity plans to fund the deal through its revolving credit facility. As of June 30, the company reported holding $401.8 million in cash and cash equivalents. The company stated that the acquisition is expected to dilute adjusted EBITDA margins by about 100 basis points in fiscal 2025.
Founded in 2017, Airbase employs around 300 people and has developed a platform offering accounts payable automation, corporate card management, and procurement capabilities, along with integration into key accounting systems such as Oracle NetSuite and QuickBooks.
The acquisition will also extend Paylocity’s total addressable market beyond its traditional HR and payroll services, allowing it to compete for a greater share of the corporate spend management sector. The integration of Airbase’s software into Paylocity’s platform is expected to offer businesses a more streamlined approach to managing payroll and non-payroll expenditures, potentially reducing financial close times and improving overall planning and control.
Paylocity, which has been publicly traded since 2014, has grown by offering cloud-based tools designed to simplify HR and payroll management. Its latest move into finance technology reflects an effort to expand its footprint in the corporate operations landscape.
Airbase’s founder and leadership team are expected to stay with the company following the acquisition, ensuring continuity in product development and customer service.