Xero Limited has completed its acquisition of Melio Payments Inc. for $2.5 billion U.S. from Matan Bar, Ziv Paz,Ilan Atias,Bessemer, Aleph and Coatue as of October 15, 2025. The planned acquisition was first announced in June 2025.
Melio is an SMB bill pay platform that integrates accounting and payments, offering SMBs and their accountants and bookkeepers easy-to-use accounts payable workflows and a wide choice of payment methods, helping them to have more visibility and control over their cashflow.
The consideration for the acquisition consists of a total up-front consideration consisting of cash payment of $2.15 billion and shares of Xero Limited valued at $360 million on a debt free cash basis and subject to conventional working capital adjustments. Additional contingent consideration, deferrals and rollovers is payable to Melio employees of up to $500 million payable over three years.
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The majority is linked to delivering against certain pre-agreed outperformance targets, and the remainder subject to the passage of time, annual business objectives and continued employment. The upfront consideration will be funded through a combination of a fully underwritten $1.2 billion, institutional placement, $0.36 billion of Xero scrip issued to existing Melio shareholders, a fully underwritten $0.4 billion unsecured revolving credit facility, and $0.6 billion of existing cash on Xero?s balance sheet. Xero has agreed to pay a break fee of $37.5m in the event that the deal does not close solely due to failure to secure HSR approval.
For the period ending March 31, 2025, Melio had revenues of $153 million. On completion, Matan Bar, Melio’s co-founder and CEO, will be responsible for the combined US business. The transaction is subject to approval by regulatory board / committee, approval of offer by target shareholders and subject to antitrust regulations (Hart-Scott-Rodino). The transaction is targeted to complete within 6 months. Anticipated FY28 synergies are expected to be $70 million in revenue and $20 million in costs.
J.P. Morgan acted as exclusive financial advisor to Xero and provided committed financing for the transaction. Lawrence M. Chu, Janet Andolina, Kevin V. Lam, Francisco (Cisco) Palao-Ricketts, Andrew Lacy, Daniel Saposnik, Paul S. Jin, Cecelia Lockner, W. Stuart Ogg, Ximeng (Sammy) Tang, Edward Holzwanger, Kevin Walsh, Michael Casaburi and Brendan Lally-McGurl of Goodwin Procter LLP acted as legal advisor to Melio. Rich Mullen, Ross J. Tanaka, Steven V. Bernard, Hallee Moore, Jess Cheng, Mike Casey, Michael S. Casey, Christopher A. Paniewski, Dena Smith, Matthew (Matt) Staples, Myra A. Sutanto Shen, Matt Norgard, Brandon Gantus, Matthew C. Norgard, Matt Gorman, John Mao, Dana J. Hall, Jamillia P. Ferris, Kimberley Biagioli, Stephen R. Heifetz, Joshua F. Gruenspecht, Anne Seymour, Jim McCann, Seth Cowell, Martin Sul and James P. McCann of Wilson Sonsini Goodrich & Rosati acting as legal advisors to Xero on the acquisition.
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