Cloud-based accounting firm Xero has bought software developer Max Solutions in full, acquiring the 84 percent that it didn't already own.
The deal cost $2 million in cash and $4 million in Xero shares to vest over three years.
In September 2010 Xero invested $200,000 in a 15.9 percent stake in Auckland-based Max Solutions, the company behind the online job, time and invoice management solution WorkflowMax – used by more than 1000 businesses in 35 countries.
Max Solutions staff will now join the Xero team and founders Gavin George and Chris Spence will take a leadership role at Xero's new Auckland premises where it is creating a development hub.
“Our team has worked alongside Gavin and Chris for four years and we continue to be impressed with their ability to innovate and deliver,” said Xero chief executive Rod Drury.
George said he had always envisaged that WorkflowMax would be a truly global business and this was a step toward achieving that dream.
According to Xero New Zealand country manager Leanne Graham, more than 3300 accounting and bookkeeping firms worldwide now use Xero.
“Adding WorkflowMax to our portfolio of products will mean we can offer a more seamless experience for our accounting partners. Not only does it help us win the entire practice, it places us in a very strong position against incumbent providers.”
Xero also announced yesterday that it had raised $20 million from shareholders and will offer new shares to other investors on the same basis.
The company plans to offer other shareholders the ability to subscribe for up to $15,000 of shares each.