Xero Completes its Biggest Deal by Acquiring Danish Workforce Management Platform Planday

Xero, one of the leading accounting software companies in Australia and New Zealand has completed its largest acquisition to date. The software giant acquired Danish-based workforce management platform Planday for a cost of around €183.5 million. According to Xero, the objective of the acquisition is to create a vibrant ecosystem for SMEs and strengthen their foothold in the small business market in Australia and New Zealand. 

Steve Vamos, CEO Xero said that the acquisition of Planday perfectly aligns with their purpose of simplifying the lives of small business owners and employees. He also said, 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.”

Acquisition cost and finances

The acquisition will cost Xero a sum of around €183.5 million out of which, approximately € 155.7 million will be the upfront cost. The remainder amount of €27.8 million will be paid based on revenue milestones and product development. 

Around 45% of the upfront cost will be paid out in Xero shares and the remaining amount will be settled in cash. On the other hand, around 50% of the earnout amount will be paid in Xero shares and the remainder will be settled in cash. 

According to Xero, it expects the new deal to provide a boost of around 3 percentage points to its operating revenue growth in FY22. 

New opportunities in new markets

After completing the acquisition of Planday, which Xero expects to be done within the first quarter of 2021, the company is set to expand its global presence. The new deal opens up new opportunities for Xero in Europe and the UK giving it access to clients in Norway, Sweden, Germany, France, and Denmark. 

Since 2017, Xero has been relentlessly working on its long-term goal of establishing itself as a small business platform. According to then-CEO Rod Drury, the objective is to assist small businesses and help them create jobs, inject capital into them, and provide the means to trade with other businesses worldwide. 

This plan was provided a massive boost in August last year when Xero announced the acquisition of the Australian cloud-based platform Waddle. 

More about Planday

Planday is a cloud-based platform that allows SMEs to efficiently manage their labor force. It includes tools that help small businesses schedule shifts, improve staff communication, track attendance, time, and manage compliance issues. At present, Planday has nearly 350,000 employee users registered on its platform in Britain and Europe. 

Karandeep V

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency. At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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