Xero (ASX:XRO) to Acquire Syft Analytics for US$70 Million

September 17, 2024 11:20 AM AEST | By Team Kalkine Media

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Xero (ASX:XRO) to Acquire Syft Analytics for US$70 Million — Image source: @Tumisu/Pixabay

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Xero Limited (ASX:XRO) has announced its plan to acquire Syft Analytics, a leading global cloud-based platform for reporting, insights, and analytics tailored for accountants, bookkeepers, and small businesses.

Strategic Expansion in Analytics and Reporting

Xero’s acquisition of Syft Analytics is set to enhance its suite of advanced reporting and analytics tools. The integration of Syft’s technology will enable Xero to offer more robust analytics, reporting, and benchmarking capabilities to its customers across key markets including Australia, the UK, the US, and other global regions.

Syft, headquartered in Johannesburg, South Africa, provides software used by accountants and small businesses in over 80 countries. This software aids users in reviewing, analyzing, and forecasting financial outcomes, a valuable feature in varying economic conditions.

Financial Details of the Acquisition

The total consideration for the acquisition of Syft and related employee incentives is up to USD 70 million. This amount includes an upfront payment of USD 40 million, which comprises approximately USD 10 million in Xero shares. The remaining balance will be distributed through earnouts and employee restricted stock units (RSUs) over a three-year period.

The transaction is expected to close in the third quarter of Xero’s fiscal year 2025 (Q3 FY25), subject to standard closing conditions and necessary approvals. Xero anticipates that the completion of this acquisition, including related transaction, integration, and operational costs, will have a minimal impact on its financial metrics for FY25.

Integration and Continuity

Following the acquisition, Syft’s team of over 70 employees, primarily based in South Africa, will join Xero. Syft, which is already a top partner in the Xero App Store, will continue to be offered as a standalone product even after the acquisition is finalized.

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