- Xero (XRO) is planning to acquire employee scheduling software company Planday for almost $284 million
- Planday is an open platform, workforce management technology with more than 350,000 employee users across Europe and the U.K.
- In conjunction with Xero, Planday's technology helps businesses and advisors adjust staffing levels to match trading conditions and control labour costs
- Xero expects the deal will add three percentage points of additional operating revenue growth in financial year 2022
- Xero shares are in the red, down 2.63 per cent for $115.87 per share
New Zealand-based account solution company Xero (XRO) is planning to acquire employee scheduling software company Planday for almost $284 million.
Danish company Planday is a workforce management platform with more than 350,000 employee users across Europe and the UK.
In combination with Xero's tech, Planday can help businesses and advisors adjust staffing levels to match trading conditions and control labour costs.
Xero says the acquisition aligns with its strategic priority to grow the small business platform.
The company hopes that the purchase will help more small businesses save time and money, deal with increasing compliance requirements, support more flexible forms of work and look after their people.
Xero's CEO, Steve Vamos, commented on the acquisition.
"Planday’s workforce management platform helps small businesses to respond to the rapidly changing nature of work," he said.
"Planday also addresses the growing need for flexibility and rising compliance demands within the workplace," Steve continued.
The company expects the deal to add three percentage points of additional operating revenue growth in the 2022 financial year.
However, it expects that transaction, integration and operating costs will have a modest negative impact on Xero’s FY22 earnings before interest, taxes, depreciation and amortisation.
Following the acquisition, Planday says it will expand its presence into other markets where Xero operates, supporting Xero’s long-term growth plans. The company will continue to offer services to existing customers and partners, including other accounting software providers.
The total potential consideration for the acquisition of Planday is €183.5 million (roughly A$284 million).
Xero is set to pay €155.7 million (roughly A$241 million) upfront, 45 per cent of which will be payable in Xero shares and the rest will be settled in cash.
A subsequent earn-out payment of up to €27.8 million (roughly A$43 million), based on product development and revenue milestones, will be settled as 50 per cent Xero shares, with the remainder being paid in cash.
The sale is expected to be finalised in Q1 FY22, subject to the satisfaction of closing conditions.
Xero shares are in the red, down 2.63 per cent for $115.87 per share at 3 pm AEDT.