US IPO Next Step for Lightspeed POS


Never one to rest on his laurels, Dax Dasilva’s Lightspeed POS today announced plans for a US IPO, just a year and a half after listing stocks on the TSX. The equity will trade on the NYSE under the ticker “LSPD”.

A total of 11,650,000 subordinate voting shares will be offered for sale under the offering, which will be conducted through a syndicate of no less than 11 underwriters. 10,000,000 subordinate voting shares will be offered by Lightspeed from treasury and 1,650,000 subordinate voting shares will be offered by Caisse de dépôt et placement du Québec, which gives the local pension plan a nice exit, or at least partially. That said, the IPO price has yet to be determined.

A 30 day over-allotment option, exercisable by the underwriters, to purchase up to 1,747,500 additional subordinate voting shares, representing in the aggregate 15% of the total number of subordinate voting shares, is also being made available.

In a statement Lightspeed management said it expects the proceeds of the offering will be used primarily to strengthen the Company’s financial position and allow it to pursue its growth strategies. Closing of the offering will be subject to a number of customary conditions, including any required approvals of the NYSE and the TSX.

The timing of the move is particularly interesting as Lightspeed’s point of sale systems are sold primarily to shops and restaurants in over 100 countries. Many of those businesses are experiencing serious reductions in their revenues as Covid-19 has slowed commerce, and especially brick and mortar commerce, in most developed and emerging markets. As reported by Montreal In Technology just a month ago, Lightspeed posted a loss of $20 million last quarter, double the amount lost in the same period last year.

That said, the company has posted solid and accelerating revenue growth over the last number of years. However, costs are also rising quickly. Some have reported that the financial crisis caused by Covid-19 will provide Lightspeed an opportunity to buy up smaller competitors.

Though the company is burning through cash due to its hyper-growth spending, the company’s operating income, net income and by extension, EPS have been in the red every year for which numbers are available (since year ending March 31, 2017). At last year end the company had also taken on an additional $30 million of long-term debt.

UPDATE TO THE STORY: In a separate release Lightspeed announced that shares would begin trading on Friday, September 11, 2020 at an IPO price of $30.50 USD. At that price, aggregate gross proceeds to the company would be in the amount of US$305,000,000 and US$50,325,000 for the Caisse.

 

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