Xero Limited, a New-Zealand cloud-based accounting software platform announced yesterday the acquisition of Planday, a European workforce management platform.

Headquartered in Denmark, Planday’s staff management platform simplifies employee scheduling, allowing businesses to forecast and manage their labour costs.

Aligned with Xero’s strategic priority to grow the small business platform, the acquisition of Planday will help more small businesses save time, save money, deal with increasing compliance requirements, support more flexible forms of work, and look after their people, according to the firms.

Planday is an open platform that integrates with Xero, other accounting solutions and third-party workforce-related apps, to deliver a real-time view of staffing needs and payroll costs, alongside key business performance metrics. The primary markets in which Planday currently operates are Denmark, Norway, Sweden, the UK, Germany and France.

“When combined with an accounting solution, such as Xero, Planday is able to provide insights to a business or its advisor that help them to adjust staffing levels to match trading conditions and control labour costs, which are often an employer’s largest expense,” the company stated.

Planday’s cloud-based technology offers significant flexibility and self-service functionality through a mobile app. Employers and employees can communicate, collaborate on scheduling, track time and attendance, manage payroll, vacation, absence, and other labour related compliance needs.

Following the acquisition, Planday will expand its presence into other markets where Xero operates, supporting Xero’s long-term growth plans.

The total potential consideration for the acquisition of Planday is €183.5 million which includes an upfront payment of €155.7 million and a subsequent earnout payment of up to €27.8 million based on product development and revenue milestones. Approximately 45% of the upfront consideration will be payable in shares in Xero Limited and 55% will be settled in cash. Up to 50% of the earnout payment will be settled in Xero Limited shares with the remainder being paid in cash.

Completion of the transaction is expected in Q1 of Xero’s financial year ending 31 March 2022 and is subject to the satisfaction of closing conditions.

Xero CEO Steve Vamos, said,“The acquisition of Planday aligns with our purpose to make life better 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 within the workplace.”

Planday CEO Christian Brøndum added, “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 businesses, for people, for growth and for communities. We’re looking forward to working within the Xero family to build a strong launchpad for businesses and employees to manage their time and joint potential.”