Lightspeed has officially announced the pricing of its initial public offering (IPO), of 15,000,000 subordinate voting shares at a price of $16 per share, for a total gross proceeds of $240 million CAD.
“We have been able to access large global investors looking at tech investments around the world.”
The company indicated in an announcement late Thursday evening that the Toronto Stock Exchange has conditionally approved the listing of the subordinate voting shares, and the shares are expected to begin trading on the TSX on an “if, as and when issued basis” on March 8, 2019, under the ticker LSPD. The offering is expected to close on March 15, 2019.
BMO Capital Markets, National Bank Financial Inc. and J.P. Morgan Securities Canada Inc. are acting as lead underwriters and joint bookrunners for the offering, while CIBC World Markets Inc., TD Securities Inc., Raymond James Ltd. and Scotiabank are also acting as underwriters.
Lightspeed has also granted its underwriters an over-allotment option, exercisable in whole or in part at any time for a period of 30 days following the closing date of the IPO, to purchase up to an additional 2,250,000 subordinate voting shares in aggregate at the $16 per share price.
“The price of the offering and speed of the offering being committed to is a testament to the fact that Lightspeed has a strong story and there is clearly demand for high growth tech stories from Canadian investors,” Mark MacLeod, the founder of SurePath Capital Partners told BetaKit.
This announcement of Lightspeed’s IPO pricing comes a month after the company filed its preliminary prospectus with Canadian securities regulators in February. While the stated intention at that time was to raise $200 million CAD, the offering size was increased to $240 million as the price per subordinate voting share was increased above the initial marketing range of $13 to $15.
The company, which develops cloud-based POS and e-commerce software for SMBs appears to have been slowly preparing for this IPO over the past couple of years. It added former Google and OpenText CFOs Patrick Pichette and Paul McFeeters to its board of directors in November, and appointed Brandon Nussey as its new CFO in April 2018. The company also hired a new CTO, John Vandermay, in late November, who has since left Lightspeed. It also closed a Series D funding round in late 2017 of $207 million, which Lightspeed used to help grow its international presence.
Through its prospectus filing we have learned that Lightspeed pulled in $72 million USD in revenue over the past year. Its revenue for its most recent quarter ending December 31, is listed as $20 million USD, which shows 33 percent growth from the same time last year. However, it also posted a net loss of $96 million USD in the fiscal year ending in March 2018, which includes a $60 million pre-tax redeemable preferred shares charge (not relating to operations), and operating losses of $21.9 million. The company has still shown growth, however, with a compound revenue growth rate (CAGR) of 36 percent.
Lightspeed currently operates in more than 100 countries with eight offices spanning Canada, the US, Europe, and Australia. In its filing, it stated that it currently has 47,000 plus customer locations and a gross transaction volume of $13 billion plus.
The company is likely not going for a dual listing on the TSX and the New York Stock Exchange (NYSE) due to the fact that companies typically need $100 million minimum revenue and a $500 million minimum market cap to list on both exchanges (Lightspeed’s market cap, as stated above, is $240 million).
Regarding the choice to only pursue a TSX listing, Dax Dasilva, the founder and CEO of Lightspeed, told BetaKit, “With the TSX, we have been able to access large global investors that look at tech investments around the world. We’re confident with the decision to initially list only on the TSX because we have still attracted these investors on both sides of the boarder while staying true to our Canadian roots.”
He noted that Lightspeed plans to consider a US listing “in due course”
With files from Douglas Soltys and Meagan Simpson.