The Xero Ltd (ASX: XRO) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) business and accounting software provider closed yesterday trading for $144.40. In morning trade on Tuesday, shares are changing hands for $145.78 apiece, up 1.0%.
For some context, the ASX 200 is up 0.3% at this same time.
This comes following the announcement of a strategic US$70 million (AU$104 million) acquisition.
Here's what's happening.
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ASX 200 tech stock to expand global accounting footprint
The Xero share price is in the green after the company reported it is acquiring South Africa-based Syft Analytics.
Xero said its acquisition of the global cloud-based analytics accounting platform company will accelerate its offerings to customers in Australia, the United Kingdom, the United States, and other global markets.
Accountants and small businesses use Syftʼs software in over 80 countries, the majority of whom are in Xeroʼs largest markets.
Management plans to embed Syftʼs functionality within Xero over time.
Xero will pay up to US$70 million for Syft. This comprises an upfront payment of US$40 million (including approximately US$10 million in Xero shares), with the balance due in earnouts and employee-restricted stock units (RSUs) over three years.
The company expects to complete the transaction in the third quarter of its 2025 financial year. This remains subject to the satisfaction of customary closing conditions, including necessary approvals.
Syftʼs 70-plus employees, mostly based in South Africa, will transition to Xero as part of the acquisition.
Commenting on the deal that appears to be helping lift the Xero share price today, CEO Sukhinder Singh Cassidy said, "Xero has always focused on reimagining how accounting software can empower small businesses by providing insights to help them and their advisors run their business better."
Cassidy added:
Syft accelerates this further by offering deeper insights to help both small businesses and accounting and bookkeeping partners to make informed decisions.
Today's announcement supports our strategy to create winning customer solutions by strengthening our accounting offering – one of the three most critical small business jobs.
The ASX 200 tech stock noted that Syft is an existing, top Xero app partner in the Xero App Store. Management said that Syft will continue to be available as a standalone offering following the acquisition.
Completion of the acquisition – including transaction, integration and operating costs – is expected to have minimal impact on Xeroʼs financial metrics in FY 2025.
Xero share price snapshot
With today's intraday moves factored in, the Xero share price is up 28% in 2024.
