Xero spends $800K in cash, scrip on Wgtn software firm
Xero, the cloud-based accounting software company, has bought Wellington-based developer Spotlight Workpapers for $800,000 in cash and scrip.
Xero will continue to build functionality and scalability of Spotlight, keeping past-owners Richard and Julie Francis on to help development and operation, it said late today. The acquisition comes after a $6 million cash and scrip deal to buy-out Auckland-based firm Max Solutions earlier this year.
Spotlight integrates with Max Solutions' Workflowmax practice managment software. Earlier, consultant and blogger Ben Kepes told NBR Xero would buy another company in the space.
"These acquisitions further strengthen Xero’s hand in the accounting software market, particularly against incumbent suppliers," chief executive Rod Drury says.
"We’ve had clear signals from our accounting partners that we should add Workpapers to our stable."
This evening, Mr Kepes told NBR, "When writing about potential acquisition targets for Xero, a very real hole was evident. This news confirms that analysis."
He added, "I look forward to seeing Xero leverage a more consistent product platform for growth here and overseas."
Last year Xero decided to forego short-term profits for a growth strategy, and has been keen to buy assets, including the two New Zealand firms and Australian payroll company Paycycle.
Xero shares [NZX:XRO] closed up 2.2% to $5.52, having joined the NZX 50 Index last month.
The announcement was made after the market closed.
Back to home
Back to top
Print
Latest
NBR SERVICES
SUBSCRIPTIONS
Sign up for NBR subscriber content or email alerts
Comments and questions16
Gee, that guy Ben Kepes called it right huh? Funny.... *troll*
Maybe Xero could split their future profit results identifying the profit from the core Xero business and also the seperate entities purchased - for transparency purposes.
This will allow investors and the market to identify how well or bad the core Xero business is going and the profits from recent acquisitions do not mask inadequacies in the core business.
Time will tell but i still predict tears here when the steam runs out and the investors stop topping up the tank each time the company exhausts the cash supply.
Who cares what division any profit is from? If you did Accounting 101 you'd understand that it's not as simple as that anyway (see division of fixed costs across cost centres, and why loss-making in some divisions results in greater profit overall).
Profit is profit. And capital gains are capital gains. And stupid trolls are stupid trolls.
And narrow minded stupid people like you with a concentration span of a minute only see the short term view - they don't care about the state of the overall company until ot folds and they lose their money - and then they cry like babies.
If Xero can't make money from its core business and masks its issues by buying companies which generate small profits so next year they can annnounce a profit of $1M which is an x% increase on last year - but none of that profit came from the core Xero business - then this whole exercise is futile.
But you will probably be still buying the shares until the market finally realises that the company is wildly overvalued - based on Accounting 101 principles - and then when you and others finally realise you will have very teary eyes and very empty pockets..
There is only one stupid troll here and its not me
It must be horribly frustrating for you and your anti-Xero campaign that they're going from strength to strength.
You must live a pretty sad existence too - waiting and hoping for hundreds of people to lose their money just so you can say "I told you so!".
Actually - regardless of whether The Doctor is anti-Xero or not I think their posting is basically right. In my view Xero formed principally to compete in MYOB's space with a head start in SAAS. This is now long gone and they don't seem to be able to sell their core product WITHOUT these extra bits and pieces that Xero back-ends onto. I think they're stuffed in the medium term too - unless US money buys them - and that's Drury's end game.
Whatever happened to NZ, then OZ, then UK? MYOB woke up, that's what.
Weren't you saying that when the shares were at $1, then at $2, then at $3 blah blah blah
I don't think xero can split those numbers, because most of these modules(added via acquisitions) are given as freebies to clients like us. If you look at these acquisitions, they are just missing bits or components of the platform. They help drive revenue for Xero-as platform. We were bit hesitant couple of years back as Xero was missing some of these modules. Now some these are put in place via acquisitions and by Xero in house development. Ask your own accountant how good is xero and does any of these acquisitions make xero a compelling subscription?
Disclaimer - Xero user & shareholder.
So Vend did not make the cut this time, but it's just a matter of time. Xero will continue to buy who they see fit whether it makes sense or not.
Why would Xero buy Vend? Xero is not interested in being the biggest player in NZ- they want to be the big player in the world, and Vend might be shoulders above in this market, but they are tiny with many other competitors in the US.
What Xero does from now on is about dominating and owning the accounting partner space.
Smart move on Xero's part. My company was an early adopter of Spotlight reporting, and it's grown from a useful, to an indispensable tool for our management team, and our board over the past two years. Looking forward to seeing Xero take this forward.
Is this company Equiticorp 2012 version??
Share price all hyped up - buying grubby little companies to provide more hype to the market and its share price based on unrealistic earnings multiples.
At some stage the Ponzi scheme collapses'
When will that be?
Is there a 'B' side to your record. You trolls don't know when to give up. Go get a job and leave the rest of us to make money how we see fit!
Take your own advice then! Xero has recently had $4M of taxpayer money poured down it's throat. Every NZer has a right to query it. If you want to invest in it go for your life. Wouldn't mind my portion of the $4M back. What a bloody waste.
Perhaps you could have it back in the income tax paid by staff who have moved to NZ to work for Xero? And the non measurable effect that a high tech company has on reversing the brain drain trend?
Some of us have not been drinking the Kool-Aid.
P.S I use the product and think it is great. But the share price is based on "what if".