Billtrust, a publicly traded financial technology provider, today announced that it has agreed to be acquired by investment firm EQT in a $1.7 billion transaction.

The acquisition values Billtrust at $9.5 per share. That represents a 64% premium to the price at which the company’s stock closed on Tuesday.

Billtrust, officially BTRS Holdings Inc., sells cloud services that business-to-business companies use to process payments from customers. An enterprise can use Billtrust’s services to create an online store and enable its customers to make purchases on a self-service basis. 

Billtrust also offers several other features. It enables companies to accept multiple payment methods, as well as offer credit to streamline complex transactions. Companies can sync transaction data from Billtrust to other applications, such as their enterprise resource planning software, using a set of built-in integrations. 

Large enterprises often use a type of cloud service known as an accounts payable portal to manage supplier payments. Billtrust provides a platform called the Business Payments Network that enables suppliers to send invoices directly to their enterprise customers’ account payables portals. According to Billtrust, the platform reduces the need for custom software development and lowers the associated costs.

The Business Payments Network has emerged as an important source of sales growth for Billtrust. Last quarter, revenue from the platform increased 71% year-over-year. The momentum of the Business Payments Network helped Billtrust grow its net revenue by 28.5%, to $40.6 million, during the quarter. 

Billtrust expects to close its 2022 fiscal year with total net revenue of between $166 million and $171 million. At the midpoint, Billtrust’s forecast represents a 28% increase over the prior year. The company is currently unprofitable, but expects to become free cash flow positive by the end of its 2023 fiscal year.

The fact that Billtrust is moving closer to profitability may be one of the reasons EQT has agreed to pay a 63% premium over the company’s last closing price. The rapid growth of Billtrust’s Business Payments Network was potentially also a factor. The company expects the acquisition to complete in the first quarter of 2023. 

“We look forward to partnering with Billtrust in its journey to help customers digitize and streamline their finance operations,” said Arvindh Kumar, an EQT partner and the co-head of the investment firm’s global technology sector team. “The Billtrust platform features modern solutions, a compelling value proposition, and, like EQT, a commitment to innovation and transformation in the digital era.”

EQT is a Stockholm-based investment firm with 90 billion euros in assets under management as of March. In 2018, EQT inked a $2.53 billion deal to acquire enterprise software maker SUSE SA. EQT took SUSE public three years later in a listing that raised 1.1 billion euros.

Image: Billtrust