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Xero Take Over Toronto-Based A...Xero, the New Zealand-based software company has made its biggest acquisition ever, earlier this week. The company acquired Hubdoc, a Canadian accounting firm for the US $70M in cash and shares.
“The acquisition of Hubdoc enables us to take the next step in delivering a platform that seamlessly connects small businesses with their financial data, and their accounts and bookkeepers," said Steve Vamos, Chief Executive, Xero.
According to a source, Xero will pay $21M in cash and $39M in shares and the rest $10M in the next 18 months. The shares have increased its value by 4.4 percent to A$ 44.66, which values Xero now at A$ 6.2
Xero will carry out the transaction through a funding arrangement, and due to tax, integration costs, etc, the amount is likely to trim NZ$7 million from earnings before interest, tax, depreciation, and amortisation by next year’s March.
The investors were very positive about the deal, as the share percentage was up by 3.3 percent to $44.21 on Wednesday afternoon.
According to Xerox, Hubdoc’s data capture capabilities such as collecting bills and statements, receipts from various banks and telecom providers help them to integrate seamlessly with their platform.
“This acquisition accelerates our ability to streamline the collection and classification of the data small businesses and their advisers need in order to focus on driving better business outcomes,” added Mr. Vamos.
Hubdoc was incorporated in the year 2011. The company provides various services across Canada, USA, Australia, and the UK. It will continue to work as an individual unit led by both Jamie McDonald and Jamie Shulman, Co-founders and Co-CEO's of the company respectively.