AvidXchange Inc. closed another acquisition just before the new year, signaling the company has no plans to slow down. CEO Michael Praeger also said AvidXchange has resumed planning for its second headquarters building.
Charlotte-based AvidXchange, an automated payments provider, bought Core Associates to expand its presence in the construction industry. AvidXchange and Core have worked together for years. Core is best known for TimberScan, a management platform for commercial real estate users.
Financial details of the deal were not disclosed.
"Like every other acquisition for AvidXchange, a key piece of it is that we're a growth company, and so we're looking to not only what it is today, but how do we grow it in the future," Praeger said.
Core provides software to automate accounts payable. AvidXchange plans to build on those services by integrating its AvidPay network into that software, Praeger said. It kept all of Core's 70-plus employees.
Praeger sees big opportunities to grow by bringing its services to the construction industry. Many of those middle-market companies are still largely paper-based operations. The pandemic has also pushed more companies to digital. AvidXchange saw a slump when the pandemic first hit, he said, but transaction volume bounced back later in 2020.
Leaders have restarted the planning process on AvidXchange's second headquarters building — the Foundry 2. That process stalled as the firm navigated Covid-19, Praeger said. He is hoping for a 2023 opening.
In December 2018, AvidXchange announced its $41 million headquarters expansion just north of uptown. It pledged to hire more than 1,200 people over five years, with the deal garnering roughly $25 million in state and local incentives. Plans call for another 200,000-square-foot building there to mirror the existing one.
Praeger said the state has shown some flexibility on the jobs pledge. That being said, AvidXchange hired more than 400 people last year. About half of those were net new jobs, with the majority based in Charlotte. He said it is premature to say whether AvidXchange will meet the original pledge in the chosen time frame, but he is confident it will at least be in that range.
AvidXchange still sees value in having office space, especially for collaboration purposes, Praeger said. He doesn't think the company will permanently go fully remote. There will be more flexible, hybrid options.
AvidXchange has also been amassing capital since late 2019. Since that October, the firm has closed on $601.4 million in equity capital — more than $450 million of which closed in 2020. That is the most it has raised in a year since its founding 20 years ago.
Praeger said the firm wanted to replenish capital following its acquisition of BankTEL in September 2019. Acquisitions are a good way to enter new verticals. He said last year's capital raise was unexpected. The number kept increasing with continued market support. AvidXchange used some of those funds to purchase Core Associates.
"Being acquisitive on the acquisition side is something that we're going to continue to do and probably even be more aggressive in," Praeger said, although he doesn't expect to build capital at such a fast rate this year.
He said AvidXchange will also continue securing partnerships, perhaps one about every quarter. Its partnerships allow for more internal growth in the client base. There is one partnership set to pan out this quarter, but Praeger declined to give further details.
AvidXchange has about 6,000 clients across North America and can process more than $140 billion in transactions annually. It has roughly 1,500 employees, most of whom are based in Charlotte.
Financial Technology Partners LP and FTP Securities LLC were the financial and strategic advisers in the Core Associates deal.
