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Xero shares now trading on the ASX

UPDATED: Added Sky Business video below

On top of the huge momentum we have both globally and in Australasia at the moment, it’s fantastic to be able to advise that Xero shares are now tradable on the ASX. With this dual listing the same pool of shares are available across both the ASX and NZX.

This is a huge milestone for the company and recognises how important Australia is to the company’s aspirations. We love it when our partners and clients, who have invested so much of their own time and energy into Xero, become shareholders.

Note we haven’t taken this opportunity to raise more capital as we have raised more than NZ$85 million previously. Xero’s IPO on the NZX back in June 2007 raised NZ$15 million and subsequently MYOB co-founder Craig Winkler and Paypal founder Peter Thiel both invested.

We’ve talked before about the progress of Xero in Australia. Here is an interview with Sky Business from Wednesday looking at the competitive environment and the ASX listing.

The recent operating update showed the number of paying customers here tripling to 32,500. Clearly the integrated payroll, and the support of the growing number of accounting and bookkeeping partners that we saw at Xerocon in July is paying off and new features such as the planned electronic tax filing with the ATO will only drive it further.

Behind the scenes we’ve been investing in more capability to handle further growth. As well as application and operating infrastructure, we’re closing in on 300 staff across Australia, New Zealand, UK and US. We are expecting to have 60 staff in Australia by Christmas and will have a brand new larger office space for our Australian HQ in Melbourne.

With the ASX listing we’ve taken another significant step in building our organisation while making it easier for more people to become Xero shareholders.

 

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10 comments

Cary Thomson
8 November 2012 #

Congratulations Chris, Rod and everyone else involved, that’s a fantastic milestone -although I may be biased as I’m an ex-kiwi who has crossed the ditch!

Anna
8 November 2012 #

Have you given any more consideration about listing Xero on the NASDAQ? Rod Drury was quoted in this article http://computerworld.co.nz/news.nsf/news/orion-health-mulls-going-public “the company is not ruling out a Nasdaq listing in the future “

Rod Drury
8 November 2012 #

Hi Anna,

No update but Nasdaq is always an option. We understand that once businesses get to 100m in revenue they are getting into the zone.

For other companies considering listing I think we’re showing that being NZX listed still provides strong business options in the future.

James R
9 November 2012 #

Great Stuff. Any chance of an explanation of dual listing for dummies? I’ve never understood how this works.
If a current shareholder decides to sell some shares on the NZX are these shares available to buy on the ASX? Or can a seller specify an exchange to sell to?
I’m guessing it is the latter given the sell orders currently look quite different and that the former would be difficult with two currencies and tax regimes.
Do I need to worry about which exchange to sell on? I’m guessing I can sit back and let the market work with more sophisticated investors keeping the two markets aligned? So many questions. I can’t find any decent explanation of how this works.

Scott Barrington
9 November 2012 #

Great news guys, I know our Australian accountants will be happy about this.

Richard Wood
9 November 2012 #

Hi James
Xero is listed on each exchange separately, and they operate independently. If a shareholder decides to sell some shares, a broker may offer them on the NZX or ASX. Yes, we can expect that market forces will keep the two markets aligned.

James Solomons
9 November 2012 #

Congrats Xero !!

Time to find some cash and invest !

Anton Gerner
9 November 2012 #

Taking into account exchange rates, the prices listed on NZX and ASX are about 10c different at the moment. Trying to understand how this dual listing works?

Cath
12 November 2012 #

Hi do you think the increase in share price we are seeing today is coming from the Aussie investors .. It has been a huge jump in the last couple of days.. We have been here from day one …. enjoying the ride.. But it would be great to get some feedback on these jumps thanks

Rod Drury
12 November 2012 #

Hi Cath, we don’t manage the share price.

We do have our interim results coming out later in the week but our numbers have been signalled already.

The only thing we are aware of that has changed in the industry is the private equity company behind MYOB, Bain Capital, has signalled they are selling down equity in MYOB and must be increasing their debt levels even further. They must have released a prospectus on that.

http://afr.com/p/markets/capital/myob_lines_up_listed_notes_offer_5JCy4RxDL96v5lcSRTYaXL

Privately owned accounting software firm MYOB is set to launch a $155?million ASX-listed retail note as early as this week.

The funds raised will allow private equity owner Bain Capital to reduce its equity investment in the company with the intention of increasing the total return once it exits its stake.

Morgan Stanley, UBS, Deutsche Bank and Macquarie were appointed on the raising while ANZ Banking Group and Westpac were also appointed to manage the sale.

The subordinated or “mezzanine” notes will pay a high interest rate of 9 to 10 per cent and will be similar to past listed note offers by Healthscope, Myer and Affinity Health.

Listed notes have been used in the past to finance private equity deals in Australia. The most recent listed note was issued in November 2010 by Healthscope. The healthcare operator’s private equity owners, TPG and Carlyle Group, raised $200 million via listed notes to reduce their equity investment in the company following a $2.7 billion takeover.

The notes paid 11.25 per cent on issue and trade at 5 per cent above par value. The terms allow investors to subscribe to shares in the company at a discount in the event of an IPO.

MYOB, which provides accounting software to small and medium businesses, was sold by Archer Capital and its co-investors to Bain Capital in August 2011 for $1.2 billion.

The transaction was the third largest private equity transaction in the Australian market. The buyout was financed by a $580 million five-year loan which pays an interest rate margin of between 475 basis points and 300 basis points depending on the leverage of the company. MYOB’s bankers are said to be finalising the terms of the offer, which has been timed to coincide with an announcement of its new cloud computing system.

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