Paylocity to broaden financial management capabilities with $325m Airbase deal

Paylocity (NASDAQ: PCTY), a leading provider of cloud-based HR and payroll software solutions, has made a notable move in the financial technology sector by acquiring Airbase Inc., a modern finance and spend management software company, for approximately $325 million. This strategic acquisition marks a significant expansion for Paylocity, enhancing its suite of services to integrate financial management tools with its existing human capital management (HCM) platform.

Founded in 1997 and headquartered in Schaumburg, Illinois, Paylocity is known for its innovative HR and payroll solutions that streamline business processes and support workplace culture. Airbase, established in 2017 and based in San Francisco, provides a comprehensive spend management platform designed for mid-sized companies. The company’s platform includes advanced features for managing expenses, bills, and procurement, making it a valuable addition to Paylocity’s offerings.

The integration of Airbase’s capabilities with Paylocity’s HCM solutions is expected to deliver a unified platform for managing all aspects of business spend. This expanded suite of tools will offer clients enhanced visibility and control over both payroll and non-payroll expenditures, streamlining financial management processes and improving overall efficiency.

Paylocity’s President and CEO, Toby Williams, emphasized the strategic value of this acquisition, stating, “I’m very excited about the acquisition of Airbase, which we believe will allow us to provide companies with an integrated software platform to manage all aspects of their operational spend.” Williams highlighted the current challenges businesses face with disparate software solutions and manual processes, and how Airbase’s integration will address these issues by providing a more cohesive and modern solution for managing operational spend.

Airbase’s platform features several key functionalities, including automated invoice processing and purchase order matching, expense management through web and mobile apps, smart corporate cards with built-in spend controls, and automated procurement processes. Additionally, Airbase supports a range of integrations with major ERP and general ledger systems, ensuring seamless connectivity with existing business systems.

The acquisition will be financed through Paylocity’s revolving credit facility, with no anticipated impact on its share repurchase program. The deal, pending customary closing conditions and regulatory approvals, is expected to close in the first or second quarter of fiscal 2025. Financially, the acquisition is projected to contribute approximately 1% to Paylocity’s total revenue for fiscal 2025 and may dilute adjusted EBITDA margin by about 100 basis points.

This move reflects Paylocity’s commitment to expanding its service offerings and enhancing its value proposition for clients by integrating advanced financial management solutions into its comprehensive suite of HR tools.