Montréal-based Lightspeed Commerce is selling off one of its business units for much less than it paid for it.
The e-commerce and point-of-sales firm announced on Wednesday morning that it is divesting its US hospitality product line, Upserve, to private equity firm Skyview Equity for up to $81 million USD ($111 million CAD) in cash. The transaction will pay Lightspeed $44 million USD up front, with the remaining $37 million subject to earnout over 24 months, based on performance targets.
Dax Dasilva, Lightspeed
“This transaction is another step towards focusing Lightspeed on the markets where we have the strongest right to win.”
The deal’s total cash consideration is nearly $350 million less than the $430 million in cash and stock Lightspeed paid for Upserve back in 2020 as a way to strengthen its presence in US restaurants.
Now, as Lightspeed undergoes a transformation plan, the company said in a statement that it is actively trying to streamline its portfolio and focus on its “two core growth engines” of retail in North America and hospitality in Europe. As a US hospitality product, Upserve doesn’t fit in either of those buckets.
As of its Q3 earnings report, those growth engines made up two-thirds of Lightspeed’s revenue. With the removal of Upserve, Lightspeed said that they now make up 75 percent of revenue.
“This transaction is another step towards focusing Lightspeed on the markets where we have the strongest right to win,” Lightspeed founder and CEO Dax Dasilva said in a statement.
Dasilva added that the analytics technology Lightspeed acquired with Upserve formed the foundation of its Insights product, which will remain with the company as a core component of its flagship restaurant solution.
Lightspeed said that Upserve contributed around $140 million in total revenue and $26 million in total gross profit towards its fiscal 2026. The deal involves roughly 3,200 US hospitality customer locations and around 70 employees who are expected to join Skyview as part of the sale.
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Founded in 2005, Lightspeed sells point-of-sale and commerce software and hardware to restaurants, retailers, and hospitality providers. The company is dual-listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol ‘LSPD.’ Lightspeed has been executing on its transformation plan since deciding against a company sale in 2024.
In its most recent earnings report, Lightspeed’s revenue exceeded expectations, but market reaction remained tepid as the company posted another net loss. Investor reaction continued to be muted with the Upserve selloff, bumping $LSPD stock just over one percent to $12.52 CAD per share on the TSX as of this writing. $LSPD is still down 25 percent year-to-date.
The company’s next fiscal update is set to come on May 21, with the release of its 2026 earnings report. Lightspeed said in its news release that it expects its current fiscal year, 2027, to deliver Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of between $75 and $95 million.
Lightspeed said the sale of Upserve is expected to “meaningfully improve” its revenue growth and gross profit growth trajectory. With the divestment, Lightspeed said it has further flexibility to make share repurchases, expand its merchant cash advance program, and make investments in product and go-to-market.
Feature image courtesy Lightspeed Commerce.