Software company Lightspeed POS Inc. took advantage of strong investor interest in technology plays by boosting the size of a stock offering by 20 per cent, raising US$588-million to fund its acquisition-focused growth plans.
Montreal-based Lightspeed sold 8.4 million shares for US$70 each late Tuesday, after announcing on Monday that it planned to sell 7 million shares. Lightspeed said the company, along with chief executive and founder Dax Dasilva and other members of the management team, may sell an additional 1.26 million shares at the same price. Mr. Dasilva currently owns 14.4 million Lightspeed shares, worth $1.3-billion.
The money raised this week “will strengthen the company’s financial position and allow it to pursue its growth strategies,” Lightspeed said in a press release. The 15-year-old business, which is backed by the Caisse de dépôt et placement du Québec, focuses on software that supports retailers, restaurants and golf courses. Analysts said the recent share sale will likely be used for acquisitions of private companies in these areas or a new sector.
“All of the large deals Lightspeed has done to date have been positive for shareholders. They have bought assets at substantially lower multiples than their own stock, yet the acquisitions have not diluted their growth rates,” said analyst Martin Toner at ATB Capital Markets. “We believe there are lots of potential targets, in their existing verticals as well as new ones.”
Lightspeed has made a number of large acquisitions in recent months, including the $403-million purchase of restaurant software company Upserve Inc. in December and the $440-million takeover of retail software business ShopKeep Inc. in November. Both acquisitions saw Lightspeed pay with a combination of cash and shares, with the company spending a total of $268.2-million in cash.
Over the past year, the S&P/TSX Capped Information Technology Index is up by 55 per cent. That performance from a benchmark that includes many of the country’s tech plays is supporting stock sales and initial public offerings from a number of companies.
Lightspeed raised US$332.3-million in September by selling shares at US$30.50 each. The company’s share price has soared more than five-fold since going public in 2019. Shopify Inc. and Nuvei Corp. have also taken advantage of the soaring valuations by selling stock or going public. At least six private Canadian tech companies recently hired investment banks and launched initial public offerings.
Morgan Stanley, Barclays and BMO Capital Markets led this week’s Lightspeed share sale.
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