Xero (ASX:XRO) Share Price Increases Following US$70 Million Acquisition

September 17, 2024 05:40 PM AEST | By Team Kalkine Media

Xero (ASX:XRO) Share Price Increases Following US$70 Million Acquisition — Image source: Shutterstock

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Xero Ltd (ASX:XRO) has seen a 2% uptick in its share price following the announcement of a significant acquisition. As one of the leading global providers of accounting software, Xero, an ASX tech stock, has revealed plans to acquire Syft Analytics, a prominent global reporting, insights, and analytics platform.

Xero Buys Syft

The acquisition of Syft Analytics, headquartered in Johannesburg, South Africa, marks a strategic expansion for XeroSyft serves accountants, bookkeepers, and small businesses in over 80 countries, offering tools to review, analyze, and forecast financial outcomesWith a team of over 70 employees, most of whom are based in South Africa, Syft will integrate into Xero while continuing to operate as a standalone offering.

The total cost of the acquisition and related employee incentive payments is up to US$70 millionThis includes an upfront payment of US$40 million, partially in Xero shares, with the remainder payable over three years, contingent upon meeting specific conditionsThe deal is expected to close in the third quarter of Xero’s fiscal year 2025, pending regulatory approvals and other standard closing conditions.

Management Commentary

Xero CEO Sukhinder Singh Cassidy highlighted that this acquisition aligns with Xero’s mission to enhance its accounting software solutionsCassidy emphasized that Syft’s advanced insights will enable both small businesses and accounting partners to make better-informed decisions, furthering Xero’s commitment to improving customer solutions.

Final Thoughts on Xero Share Price

Xero Ltd continues to be a prominent player in the ASX tech sectorThe acquisition of Syft Analytics represents a strategic move to bolster its offerings and provide greater value to subscribersWhile Xero's share price has risen 30% this year, indicating strong market performance, the success of this acquisition will be pivotal in justifying the current valuation.

For investors considering growth opportunities, Xero’s continued focus on expanding and enhancing its services presents an intriguing prospect.

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