Payments firm BILL Holdings is exploring a sale, two sources familiar with the matter told Reuters on Tuesday, as it faces pressure from activist investors.
Shares of the company — which has a market capitalization of $4.66 billion, according to data compiled by LSEG — rose 14% in after-hours trading.
San Jose, California-based BILL is working with advisers on a potential sale, after concluding that its shares are undervalued in the public market, said the sources, who requested anonymity because the deliberations are confidential.
The talks are at an early stage, the sources said, adding that there is no guarantee of a deal.
BILL Holdings did not immediately respond to a Reuters request for comment.
The pressure on BILL began to mount publicly in September, when activist investor Starboard Value disclosed in a regulatory filing that it had amassed an 8.5% stake in the company. A week later, Reuters reported, citing sources, that Starboard nominated four candidates for BILL’s board of directors, signaling its readiness for a proxy fight to force changes.
Around the same time, Reuters reported that Elliott Investment Management, another prominent activist firm known for pushing companies toward sales, had also built a large stake. Elliott was said to be advocating for BILL to pursue a sale, adding a second powerful voice calling for a strategic review of the business.
BILL Holdings provides cloud-based software that helps small and midsize businesses automate complex financial operations, such as managing accounts payable and receivable. The interest from activists suggests they believe the company’s underlying technology and market position are not fully reflected in its public valuation, making it an attractive takeover target.
The company’s revenue surged rapidly in its early years as a public company, climbing from just over $100 million to more than $600 million as annual growth topped 100% between 2019 and 2021.
Since 2022, its growth rate has cooled to the mid-teens as competition for small to medium-sized business customers has intensified.
Newer rivals such as Ramp, Brex, and Tipalti have crowded into the same market with broader, cheaper finance platforms, eroding BILL’s momentum, according to analysts and company filings.
Bloomberg News had earlier reported the potential sale.
Source: Reuters.com