Cloud-based accounting software firm Xero has announced the acquisition of workforce management platform Planday for €183.5 million (£158.5 million), considered the biggest deal for the company yet.

The sum includes an upfront payment of €155.7 million (£134.5 million), as well as a subsequent earnout payment estimated at €27.8 million (£24 million), based on product development and revenue milestones. Approximately half of the payment is to be settled in Xero Limited shares, with the remainder being “settled in cash”.

The acquisition is expected to be finalised before the end of the month, and is subject to the satisfaction of closing conditions.

Denmark-based Planday, which is a cloud-based open platform, provides businesses with a real-time view of staffing needs and payroll costs, alongside key business performance metrics. As a mobile app, it lets employers and employees communicate, collaborate on scheduling, track time, and attendance, as well as manage payroll, vacation, absence, and other labour-related compliance needs.

When integrated with accounting solutions such as Xero, it also provides additional insights which facilitate the adjustment of staffing levels to match trading conditions and control labour costs. With the acquisition, Planday is expected to expand its presence into other markets where Xero operates.

Commenting on the announcement, Xero CEO Steve Vamos said that the acquisition “aligns with [Xero’s] purpose to make life better for people in small businesses and their advisors”.

Planday CEO Christian Brøndum said that the company is “beyond excited for this next step in [its] journey”.

“Our mission is to make our customers’ day work, and make life easier for both employers and employees,” said Brøndum. “This mission fits perfectly with Xero’s passion for small businesses, for people, for growth and for communities.

“We’re looking forward to working within the Xero family to build a strong launchpad for businesses and employees to manage their time and joint potential,” he added.

The news comes less than a year after Xero announced plans to acquire Waddle, a lending platform that specialises in helping small businesses gain access to capital, for around £44 million.