Xero announced a deal to acquire small business payments platform Melio for $2.5 billion and fill a gap in its offerings by integrating accounting and bill payments.

Xero Ltd., a cloud-based accounting software firm, agreed to buy Melio Payments Inc. for $2.5 billion as the New Zealand company pushes deeper into the US market with its biggest-ever acquisition.The cash-and-stock deal for Melio includes as much as $500 million in additional performance and other payments over three years,

New Zealand accounting software giant Xero agreed to buy U.S.-Israeli payments provider Melio for as much as $3 billion, the companies said on Wednesday, accelerating the Kiwi firm's push into the U.S.