Montréal-based Lightspeed announced Thursday it is set to acquire ShopKeep, a New York City-based leading cloud commerce platform provider.
The deal, which would be Lightspeed’s largest to date, comes as the company reported its second-quarter results for the period ending September 30, 2020.
Lightspeed was originally set to acquire ShopKeep for approximately $440 million, comprised of $145.2 million in cash and the issuance of 9.5 million subordinate voting shares in Lightspeed. Update: The deal was finalized November 25, and the purchase price was adjusted based on a mechanism that was dependant on the price of Lightspeed’s subordinate voting share on the New York Stock Exchange (NYSE). A total of 7.4 million subordinate voting shares were issued as part of the deal.
Lightspeed touted its latest acquisition as a reinforcement of its “status as a clear category leader for complex retailers and restaurateurs seeking to modernize their operations.” When closed the deal would expand the Montréal company’s United States market share, which Lightspeed stated will allow it to increase investment in sales, marketing, and research and development in the region.
Speaking with BetaKit earlier this year, Lightspeed founder and CEO Dax Dasilva emphasized the company’s goal to increase its brand awareness in the US. The decision to seek a dual listing on the New York Stock Exchange (NYSE) earlier this year, the CEO stated, was highly encouraged by Lightspeed’s investors who also hoped to make the company more accessible to American investors.
Through the listing, Lightspeed pulled in $397.7 million USD as part of its initial public offering.
Founded in 2008, ShopKeep offers a cloud-based point-of-sale (POS) system, with more than 20,000 customers spanning retail, coffee shops, restaurants, and bars in the US and Canada. Upon the closing of the acquisition, Lightspeed claims it will serve more than 100,000 customer locations globally.
As it has done with previous acquisitions, Lightspeed is set to integrate ShopKeep with its own platform and expects the deal to also increase the gross transaction volume (GTV) of its customers, projecting approximately $33 billion USD globally. According to Lightspeed, ShopKeep generated revenue of approximately $50 million and GTV of approximately $7 billion in the twelve-month period ending September 2020.
In its Q2 results, Lightspeed reported total revenue of $45.5 million, a year-over-year (YoY) increase of 62 percent. Recurring software and payments revenge pulled in $41.1 million of that, also a 62 percent YoY increase. The company reported net losses of $19.5 million, close to double its losses last year ($10.1 million). Lightspeed attributed the increase to “non-cash expenses.”
The Montréal company also reported adjusted earnings before interest, taxes, depreciation, and amortization at a loss of $2.8 million, an improvement of $2.3 million from the previous year.
Lightspeed added that despite the strong Q2 2020 results, it remains cautious in the short-term given the growing number of government shutdown measures related to the second wave of COVID-19 in North America and Europe – key regions for the company.
UPDATE 11/26/2020: This story has been updated to reflect that the acquisition closed on November 25 and the final purchase price was adjusted.