New Zealand information technology company Xero said on Wednesday it would acquire US-based fintech Melio for $2.5 billion upfront, with the goal of more than doubling group revenue by 2028.

The cash-and-stock deal will also see Melio receive up to $500 million in deferred and rolled-over payments over the next three years.

The payment is largely contingent on Melio meeting specific performance targets, with the remainder subject to time-based milestones and annual targets.

The acquisition will "significantly boost" Xero's revenue as the company expects the combined business to more than double group revenue in 2028 compared to fiscal 2025.

The acquisition will also accelerate Wellington-based Xero's revenue growth in the United States and combine accounting and payment solutions onto one platform to better serve its 4.4 million users.

Melio, which has offices in New York and Tel Aviv, provides digital bill payment solutions for small businesses.