Accounting software company Xero is to buy a Danish-based workforce management software producer, Planday, for an initial price of $259 million, to boost earnings through diversification.
Planday has mobile apps which allow employers and employees to communicate more easily, collaborate on scheduling, track time and attendance, manage payroll, vacation, absence, and other labour-related compliance needs.
Xero chief executive Steve Vamos said the acquisition of Planday would fit with its aim of looking after the management of people in small businesses.
“Planday’s workforce management platform helps small businesses to respond to the rapidly changing nature of work. Planday also addresses the growing need for flexibility and rising compliance demands within the workplace.”
Xero said the acquisition would add about 3 percent growth in operating revenue next year, while the costs of the deal, integration and operating would have a “a modest negative impact” on its own earnings.
Nearly half of the initial payment would be paid in Xero shares and the rest in cash. The final price could rise another $46m if certain earnings targets are met.
Xero last year bought Australian invoice-financing start-up Waddle.
Wellington-based Xero has listed on the Australian stock exchange and has more than 2.5m customers, but has found earnings falling modestly as the pandemic hit customers’ revenues.