Accounting software provider Xero has made its largest acquisition to date after striking a deal with Denmark-based workforce management platform Planday.
On Thursday, Xero announced it will acquire the European company for an expected total of €183.5 million ($284.8 million) in a bid to meet its strategic goals to grow its small business platform.
The ASX-listed company told its shareholders the acquisition will help more small businesses save time and money, deal with compliance requirements, support flexible forms of work, and look after their people.
Xero CEO Steve Vamos said the move will help them make life easier 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 in the workplace,” Vamos said.
Founded in 2004, Planday has 200 employees working to deliver services across its main markets in Denmark, Norway, Sweden, the United Kingdom, Germany and France.
The software is an open platform that integrates with Xero, other accounting solutions and third-party apps, to deliver a comprehensive solution to manage staffing needs, payroll costs and review metrics.
Merging Planday and Xero services will allow businesses to view detailed insights to help manage staffing levels according to trading conditions and ultimately control staffing costs.
To secure the deal, Xero and Planday have agreed to an upfront cost of €155.7 million ($241.6 million) on top of €27.8 million in milestone payments, based on Planday’s revenue growth and product development.
Planday CEO Christian Brondum said the company was “beyond excited” for the 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 business,” Brondum said.