Xero's buying spree continues as it picks up Swedish firm for $23m

Xero chief executive Steve Vamos with founder and director Rod Drury. Photo / File

Xero is buying Swedish e-invoicing outfit Tickstar in a deal worth up to SEK 150 million ($23.4m) including an SEK 90m earn-out clause.

"Tickstar's technology provides Xero customers in Australia, New Zealand and Singapore with access to a well-established e-invoicing network that enables faster and more secure transactions," Xero said in a statement.

"Following the acquisition, Xero will leverage Tickstar's technology to support Xero's e-invoicing functionality." In other words, Xero will be able to bring e-invoicing in-house rather than rely on third-party networks.

The deal is expected to close on March 31 - the last day of Xero's 2021 financial year.

Transaction, integration and operating costs are anticipated to have "minimal impact" on Xero's FY2022 operating earnings.

Early in the pandemic Fisher Funds senior portfolio manager Sam Dickie told the Herald he was bullish on Xero's pandemic prospects, given its $112m in cash and unused credit lines.

"They have almost $700 million of available liquidity to not only support the business but be on the front foot with acquisitions," Dickie said.

Xero has duly jumped down the pitch. It bought invoice-lending startup Waddle in a deal worth up to A$80m ($87m) in August. Xero said the deal would have "no material impact on its FY2021 earnings.

And earlier this month, Xero said it would acquire Planday, a UK maker of workforce management software, for an upfront payment of €155.7m ($259m) - it's largest ever transaction. Xero said its purchase of Planday would have "a modest negative impact" on Xero's FY2022 operating earnings.

Xero reported 2.5 million customers for the six months ending September 30. Net profit for the period was $34.5m (from the year-ago $33.2m) as revenue rose 21 per cent to $410m.

The company has not given any guidance for the year ahead, citing Covid uncertainty.

Xero shares were up 0.2 per cent to A$121.33 in early ASX trading for a market cap of A$17.8b.

After topping A$100 for the first time in August last year, Xero shares spiked to an all-time high of A$157.99 in January before being caught in a general tech-stock pull-back.