Xero Limited is acquiring Planday, a workforce management platform that simplifies employee scheduling, allowing businesses to forecast and manage their labour costs.
The total potential consideration for the acquisition of Planday is 183.5 million euros ($294.1 million), comprising an upfront payment of 155.7 million euros and a subsequent earnout payment of up to 27.8 million euros based on product development and revenue milestones.
Approximately 45% of the upfront consideration will be payable in shares in Xero Limited and 55% will be settled in cash, while up to 50% of the earnout payment will be settled in Xero Limited shares with the remainder being paid in cash.
Planday, headquartered in Denmark, is an open platform that integrates with Xero, other accounting solutions, and third-party workforce-related apps to deliver a real-time view of staffing needs and payroll costs, alongside key business performance metrics. It currently has more than 350,000 employee users across Europe and the UK.
Planday has been a Xero ecosystem partner since 2019 and will continue to offer services to existing customers and partners, including other accounting software providers post-acquisition.
SEE:Xero's cloud accounting platform helps SMEs track their finances
Xero states the acquisition is in-line with Xero’s strategic priority to grow the small business platform, helping customers save time, money, and dealing with increasing compliance requirements.
Xero CEO Steve Vamos says, “The acquisition of Planday aligns with our purpose to make life better for people in small businesses and their advisors. 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.”
Planday CEO Christian Brøndum says the company is looking forward to with Xero to build a strong launchpad for business and employees to manage their time and joint potential.
“We are beyond excited for this next step in Planday’s journey. Our mission is to make our customers’ day work, and make life easier for both employers and employees. This mission fits perfectly with Xero’s passion for small businesses, for people, for growth and for communities,” he commented.
Completion of the transaction is expected in Q1 of Xero’s financial year ending March 31, 2022.
As at 7.30am, shares in Xero Limited are trading A$2.70 or 2.3% lower at A$116.30.
