Lightspeed POS, a cloud-based provider of omnichannel commerce platforms, has acquired Upserve Inc., a restaurant management cloud-software company based in Rhode Island. Shares rose 4.2% in the extended trading session on Tuesday.
The Upserve acquisition was made for $430 million, with a combination of $123 million in net cash and up to 5,895,365 subordinate voting shares of Lightspeed (LSPD). Canada-based Lightspeed believes that the acquisition of Upserve, a Vista Equity Partners portfolio company, will grow its position in the US hospitality market by an additional 7,000 customer locations, generating over $6 billion in Gross Transaction Volume (GTV) in the trailing 12-month period ending Sept. 30, 2020.
Commenting on the deal, Lightspeed’s CEO Dax Dasilva stated, “Combining forces with Upserve is a strategic next-step in Lightspeed’s vision of providing the most advanced commerce platform to high-performing businesses around the world.”
“We believe this acquisition will accelerate the product innovation that has enabled Lightspeed customers to tackle the greatest challenge to their industry in decades and will add exceptional leadership to our teams in anticipation of the economic recovery of the global hospitality industry,” added CEO Dasilva.
Last week, Lightspeed completed the acquisition of ShopKeep, a cloud commerce platform provider based in New York City. Overall, these two acquisitions have boosted the company’s total GTV to more than $39 billion. (See LSPD stock analysis on TipRanks)
On Nov. 29, BTIG analyst Mark Palmer downgraded Lightspeed to Hold from Buy after the stock price exceeded his previous target of C$58. The analyst noted that shares have risen 376% since he initiated coverage of the stock amidst the pandemic-driven March lows. Palmer remains constructive on Lightspeed’s growth prospects as its cloud-based point-of-sale and payments offerings have rolled out to a $100 billion-plus restaurant and retail market.
That said, Palmer believes that a significant portion of that upside is already factored into the stock’s valuation.
Overall, 6 Buys and 3 Holds add up to a Moderate Buy analyst consensus. The $47.94 average price target suggests that the stock could fall about 9% from current levels.
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