The Xero Ltd (ASX: XRO) share price is down around 4% after the company returned to trading after the Melio acquisition.
It was down even further earlier this morning, as low as $178.56, but it has risen since then. Xero is a global cloud accounting software provider with aspirations to be a significant player in the US.
Xero shares return to trading
The ASX tech share announced it had successfully completed its A$1.85 billion (US$1.2 billion) fully underwritten institutional placement announced on 25 June 2025.
The proceeds of this placement will contribute to funding Xero’s acquisition of Melio, its associated entities and transaction costs.
Melio serves US small & medium businesses and accounting firms with accounts payable, receivable and cash flow management solutions. It now has over 80,000 customers and in FY25 (ending 31 March 2025) it generated revenue of US$153 million. Its revenue has grown at a compound annual growth rate (CAGR) since 2021 of 127%.
Melio’s platform integrates with financial institutions, allowing businesses to sync payments data and avoid manual entry. It also acts as a technology service provider for vertical software as a service (SaaS) platforms and financial institutions including Capital One and Shopify, as well as distribution partners including FIserv.
Approximately 10.5 million new fully paid Xero shares at a share price of A$176 will be issued through the placement. All new Xero shares were allocated to sophisticated and institutional investors in the placement.
Xero also said eligible institutional shareholders who bid for an amount less than or equal to their ‘pro rata’ share of new shares under the placement were allocated their full bind, on a best endeavours basis.
Management comments
The Xero CEO Sukhinder Singh Cassidy said:
We’re very pleased with the strong support we’ve received from both existing and new institutional investors for this Placement. We can’t wait to welcome Melio’s world-class team to Xero, once the transaction completes, and work together to deliver on our shared goals. Melio presents an incredibly exciting opportunity for Xero and we look forward to creating a market-leading Accounting and Payments offering that maximises value for our customers and supports our 3×3 strategy and US ambitions.
Final thoughts on the Xero share price
I think Xero is one of the best ASX tech shares, and one of the best companies overall. It’s worth a spot in growth investors’ portfolios, though it’s not at a cheap price right now.
I’d definitely consider it if I had access to the share purchase plan (SPP). But, there are other ASX growth shares that I think are even better buys today.
