HR and payroll tech firm buys Airbase

HR and payroll solutions provider Paylocity has acquired spend management and AP automation software company Airbase.

"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," said Toby Williams, president and CEO of Paylocity. "Many companies use disparate software solutions or manual processes to manage their labor costs and non-labor vendor and procurement spend, and we expect this acquisition will give us the ability to provide a comprehensive solution and modern client experience for managing all spend on a single integrated platform. Airbase represents an exciting opportunity to expand our relationship with our nearly 40,000 clients to offer an integrated software platform for running their business operations, while also offering a very compelling value proposition for prospects across our target market."

The acquisition of Airbase represents an expansion of Paylocity's suite from just human capital management further into the office of the CFO. Adding Airbase's capacities to its own software gives users the ability to see payroll and non-payroll spending through a single view, which allows for real-time visibility for a faster financial close, improved planning and stronger financial controls. Users will now have tools for bill pay and AP automation, expense management, corporate cards, procurement, integrations with third party systems like Oracle and Sage, as well as QuickBooks Workflow Automation. Paylocity said it wants this added capacity to become a key differentiator for its product.

Paylocity acquired Airbase for about $325 million, funded not by outside investors but through its revolving credit facility. The company had also been planning a $350 million share repurchase program, and said it does not expect the acquisition to interfere with this.

The transaction is expected to close in the first or second quarter of fiscal 2025. The acquisition of Airbase is expected to represent approximately 1% of Paylocity's total revenue in fiscal 2025 and is expected to dilute its adjusted EBITDA margin by approximately 100 basis points in fiscal 2025. Paylocity will update financial guidance in its first quarter fiscal 2025 earnings release.