Lightspeed hits twice, announcing the second major US acquisition in a month

Lightspeed POS Inc., announced its second US acquisition of more than $ 400 million in less than a month on Tuesday, as it continues its efforts to consolidate the fragmented market for internet-based point of sale and payment products for companies. retail and hospitality.

The Montreal software company said it will pay $ 430 million in cash and stock for Upserve Inc., a Rhode Island-based company that provides internet-based restaurant management software to 7,000 restaurants in the United States, generating 40 million dollars of revenue annually. The deal comes just four weeks after Lightspeed said it would pay $ 440 million for New York-based ShopKeep Inc., which generates $ 50 million in annual revenue from 20,000 U.S. restaurants with a similar product.

“We are doubling the size of the US,” said Dax Dasilva, CEO and founder of Lightspeed, adding that her company had been in talks with Upserve for more than a year. “We want to have best-in-class teams and technologies so that we can be strongly positioned in the US on both the retail and hospitality side when we have the full reopening of the economy” after the pandemic.

Asked if the company could manage the integration of its two largest acquisitions at the same time, Mr. Dasilva replied that the company is a veteran buyer, having bought nine previous companies. “Let’s think about M&A [mergers and acquisitions] is ingrained in the company’s DNA, “he said.” We have a solid playbook for integrating these companies. “

Lightspeed pays approximately $ 123 million in cash and issues 5.9 million shares to buy Upserve, led by CEO Sheryl Hoskins.

The company also said that the dilutive impact of the cash and share transaction would trigger the automatic conversion of its multiple voting shares into subordinated voting shares on a one-for-one basis in accordance with the terms of its capital structure. The conversion means Dasilva’s voting stake in the company will shrink to 12.2% from 37.1% as its 14.4 million multiple-voting shares – worth nearly $ 1 billion on paper – will become single voting shares.

With the two agreements, Lightspeed will have 107,000 customer locations around the world serving the food service, retail, hospitality and golf markets and processing over $ 39 billion in transaction revenue. The company’s combined pro forma revenue post-acquisition would have been $ 243 million over the past 12 months.

Lightning Speed ​​has had a lot of momentum lately: the company’s shares have appreciated 60% in the last month after reporting stronger-than-expected second-quarter earnings and announcing the ShopKeep deal. The company is also listed on the New York Stock Exchange in September, raising $ 332 million in gross income. Lightspeed first went public on the Toronto Stock Exchange in March 2019, at $ 16 per share and has more than quadrupled in value since then.

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