Global accounting software group Xero (ASX:XRO) will pay up to US$70 million (around AU$104 million) for South African cloud-based reporting and analytics platform Syft.
The purchase will be an add-on to Xero’s suite of global offerings.
The cost comprises an upfront payment of US$40 million, with the remainder consisting of earn-outs and employee-restricted shares over three years.
Xero expects the deal to be completed in the March quarter of next year. Syft’s more than 70 employees, the majority of whom are based in South Africa, will transition to Xero.
ANZ-listed Xero says Syft will accelerate its insights, advanced reporting, and analytics capabilities in Australia, the UK, the US, and other global markets.
Xero plans to integrate Syft’s functionality within its software over time. Syft’s cloud-based analytics software is used by accountants and small businesses in over 80 countries, most of which are in Xero’s largest markets, making the integration easier and enhancing the offering (as Xero has more customers).
Xero stated that the integration and operating costs of the transaction are expected to have minimal impact on its finances in 2024-25.