Xero Limited has entered into a binding agreement to acquire 100 percent of Melio Limited, a leading US SMB bill pay platform that integrates accounting and payments for small businesses, accountants and bookkeepers in the United States. The acquisition is expected to be funded through a mix of cash and equity, with upfront consideration of US$2.5 billion (A$3.9 billion) in cash and equity, plus up to US$0.5 billion in additional contingent consideration, deferrals and rollovers payable over three years, largely tied to outperformance targets and continued employment.

Xero’s CEO highlights that Melio, already popular via the Xero App Store, will significantly enhance Xero’s US proposition, advancing its 3x3 strategy and global aspirations by combining accounting and payments on a single platform. The transaction aims to provide US SMBs greater visibility and control over cash flow through streamlined accounts payable workflows and diverse payment options.