Lightspeed POS signs pair of acquisition deals worth a total of US$925 million

·3 min read

Lightspeed POS Inc. is continuing its acquisition spree and efforts to consolidate the e-commerce industry with a pair of deals valued at US$925 million.

The Montreal company, which sells software for small- and medium-sized retailers and restaurants, announced Monday that it will buy e-commerce company Ecwid and wholesale software business NuOrder.

"(We are) moving from point of sale platform into this commerce platform, where we unify merchants, suppliers and consumer experiences," Lightspeed founder and chief executive Dax Dasilva said in an interview.

"These acquisitions are all about becoming that one-stop commerce platform."

Under the first deal, Lightspeed will buy Encinitas, Calif.-based Ecwid for US$$500 million, including US$175 million in cash and US$325 million in Lightspeed shares.

Ecwid, which was founded in 2009 to enable small businesses to easily add online stores to their existing sites, boasts about having 130,000 paying customers across more than 100 countries.

The second deal will see Lightspeed pay US$425 million, including half in cash and half in Lightspeed shares, for Los Angeles-based NuOrder, a business-to-business e-commerce platform.

NuOrder has worked with more than 3,000 brands including Coach, Converse, Canada Goose, Steve Madden, JW Anderson and Helmut Lang.

Lightspeed's acquisitions come as the e-commerce industry is facing increasing attention amid the COVID-19 pandemic, which pushed businesses to pivot online as temporary lockdowns and closures were enacted.

Ottawa e-commerce darling Shopify Inc. has been one of the biggest beneficiaries of the rush online, alongside international heavyweights like digital payments platforms Square and Stripe.

When asked whether Lightspeed's acquisitions were targeting Shopify's market share, Dasilva said he was focused on offering clients new, digital strategies.

"There's overlap in that respect, but I think we are still focused on our verticals," he said.

It will maintain that focus as it uses Ecwid to offer clients tools they can use to quickly sell online and unify their digital and physical operations and NuOrder to expand its network of apparel brands and open up financial services opportunities.

Lightspeed president Jean-Paul Chauvet acknowledged on an analyst call that his company is paying a bit more for Ecwid and NuOrder than it had for previous businesses.

In the last two years, Lightspeed has purchased restaurant software company Upserve, cloud-based retail management software company Vend Ltd. and ShopKeep, which helps restaurants and retailers accept payment and manage their business.

The amounts Lightspeed agreed to for Ecwid and NuOrder, Chauvet said, were about 15 times the forward revenue for each, "which we think, given the success and the momentum these businesses have, is appropriate in the current context."

"We see lots of upside here to getting access to very large customer bases from each, the payments opportunity we mentioned as well," he said.

He added the deals are "as much about cementing the strategy of the business for the next five years as anything else."

Both deals, which are subject to customary closing conditions and require regulatory approvals, are expected to close during the quarter ended Sept. 30, 2021.

The closing of the two acquisitions are not contingent on each other, Lightspeed said.

Lightspeed's shares gained 71 cents at $87.43 in midday trading on the Toronto Stock Exchange.

This report by The Canadian Press was first published June 7, 2021.

Companies in this story: (TSX:LSPD)

Tara Deschamps, The Canadian Press