Xero plans to acquire LOCATE Inventory, a US cloud-based inventory management provider, to better support the inventory needs of small business and enhance its ecommerce capability.
Terms of the deal state total consideration for the purchase of LOCATE and subsequent employee incentive payments will be $19 million. Upon completion, which is expected to take place in the coming days, consideration for LOCATE of $14 million is to be settled 20 percent in cash and 80 percent in shares in Xero Limited.
Employees will be granted $5 million in restricted stock units which vest between three and five years after completion, subject to continuing employment.er members by early next year. For Xero users, the acquisition will embed LOCATE’s inventory and ecommerce talent and capability within Xero to enhance Xero’s inventory management offering.
This will help meet increased small business clients’ demand for inventory and cash flow management tools. Using LOCATE’s inventory-accounting workflows, Xero’s new inventory solution can help small businesses track and manage inventory in real-time, across multiple locations and channels (including a number of Xero’s ecommerce partners) to better serve their customers and improve their financial performance.
The new offering is expected to launch to US customers before being made available in other markets.