• Xero raises A$1.85bn through institutional placement to fund Melio acquisition
• Placement well supported by existing and new institutional investors
• Xero to also offer Share Purchase Plan to eligible shareholders

Xero Limited (ASX: XRO) has announced the successful completion of its A$1.85 billion (US$1.2 billion) fully underwritten institutional placement. The proceeds will be used to fund Xero's acquisition of Melio Limited and associated transaction costs. Xero CEO Sukhinder Singh Cassidy expressed strong support from both existing and new institutional investors for the placement. Approximately 10.5 million new fully paid ordinary shares in Xero were issued at a price of A$176 per share. Xero will also offer eligible shareholders the opportunity to participate in a non-underwritten Share Purchase Plan, targeting to raise around A$200 million. The SPP shares will be priced at the lower of the placement price or a 2% discount to the 5-day VWAP up to the SPP closing date. Xero believes the SPP will provide the majority of eligible shareholders who could not participate in the placement with an opportunity to subscribe for new shares. The company may increase the SPP size if total demand exceeds A$200 million. The announcement also includes details on the acquisition of Melio, a US-based small business payments platform, and Xero's future outlook.

Xero expects Melio to generate revenue of US$153 million in FY25 (March 31 year end), with a revenue CAGR since 2021 of 127%.

Xero believes the acquisition of Melio presents an exciting opportunity to deliver a market-leading Accounting and Payments offering that maximises value for its customers and supports its 3x3 strategy and US ambitions.