The AvidXchange Buyout: A Fair Deal or a Shareholder’s Scam?

The proposed $2.2 billion acquisition of AvidXchange (NASDAQ: AVDX) by TPG and Corpay has ignited a critical debate: Is the $10.00-per-share cash offer a fair valuation for shareholders, or does it underprice the company by as much as 50% compared to recent analyst targets? With shares trading at just $8.79 as of May 21, 2025—far below the $15.00 price target cited by analysts—the transaction raises red flags about undervaluation, governance, and potential legal fallout.

The Buyout Basics: A 22% Premium, But Over What?
On May 6, 2025, TPG and Corpay announced plans to acquire AvidXchange, a leader in accounts payable (AP) automation and payment solutions for middle-market businesses. Under the terms, shareholders would receive $10.00 per share, a 22% premium over AVDX’s May 5 closing price of $8.20. However, this figure pales compared to the 45% premium over its March 12 price of $6.89—a date tied to initial buyout rumors—and starkly contrasts with a $15.00 price target maintained by at least two analysts prior to the announcement.

The deal’s fairness hinges on whether the $10.00 offer reflects AvidXchange’s intrinsic value or merely capitalizes on short-term market dips. Analysts argue the company’s long-term growth potential—driven by its 8,500+ clients and 1.35 million suppliers—supports a higher valuation.

Analysts vs. the Board: A $15 Target Ignored
Recent research reveals a glaring disconnect between the board’s acceptance of $10.00 and Wall Street’s outlook. As of May 2025, the consensus price target for AVDX averaged $12.46, with a high estimate of $15.00. Notably, this $15.00 target—set by at least two prominent analysts—was still in place just weeks before the buyout announcement.

The data tells a story of undervaluation:
- The $10.00 offer is 30% below the $15.00 high target.
- AVDX’s 90-day volume-weighted average price (VWAP) stood at $8.62 as of May 6, making the $10.00 premium appear modest.
- Even the $10.00 offer is 22% above the stock’s May 6 close, suggesting the market already priced in regulatory or shareholder approval risks.

Legal Risks: Is This Deal a Breach of Fiduciary Duty?
The gap between the buyout price and analyst targets has already drawn scrutiny. On May 15, 2025, Kaskela Law announced an investigation into whether AvidXchange’s board “fully explored strategic alternatives” to maximize shareholder value. The firm’s statement highlights a critical question: Could the $10.00 offer be the result of inadequate due diligence or collusion between the board and buyers?

Key legal red flags include:
1. Management’s Equity Roll-Over: Executives holding significant equity are reportedly rolling over their stakes into the new private structure. This could incentivize them to accept a lower price to avoid dilution.
2. No Financing Conditions: While removing financing risk is positive, it may also signal the buyers’ lack of urgency to negotiate a higher bid.
3. Timing of Earnings Cancellation: The abrupt cancellation of AVDX’s May 7 earnings call—paired with the buyout announcement—raises concerns about whether material financial data was withheld to suppress the stock price.

Why This Matters for Shareholders
If the $10.00 offer is indeed undervalued, shareholders face a stark choice:
- Accept $10.00 and miss out on potential upside from AvidXchange’s growth trajectory.
- Demand a Reconsideration: Pressure the board to seek a higher bid or explore alternative suitors.

The $15.00 analyst target isn’t arbitrary. It reflects AvidXchange’s 10.7% annual revenue growth forecast through 2026 and its untapped potential in AP automation, a sector projected to hit $20 billion by 2027. The board’s decision to settle for $10.00 may now be seen as a failure to secure the company’s true worth.

Investment Action: Vote With Caution, Litigate if Necessary
Shareholders should:
1. Reject the Offer: Vote against the buyout at the upcoming shareholder meeting, creating leverage for renegotiation.
2. Support the Lawsuit: Back Kaskela Law’s investigation to force the board to justify its decision or face legal consequences.
3. Monitor Liquidity: AVDX’s $389 million in cash as of March 2025 provides a safety net, but prolonged uncertainty could depress the stock further.

Conclusion: A Crossroads for AvidXchange’s Future
The $10.00-per-share offer is a gamble—not just for shareholders, but for TPG and Corpay. If the deal closes as is, AVDX’s private owners may struggle to justify the premium over a company with widening net losses and slowing EPS growth. Conversely, a higher bid could unlock value for all parties.

For now, the $15.00 price target isn’t just an analyst’s number—it’s a rallying cry for shareholders to demand fairness. The board’s rush to accept $10.00 may prove costly if courts or market forces ultimately expose the deal’s undervaluation.

Act now: If you own AVDX shares, vote against the deal and consider legal action. The path to $15.00—and beyond—depends on it.