Likely Lightspeed POS Suitors Include Worldpay and Private Equity

With Lightspeed Commerce engaged in discussions of “potential strategic alternatives,” private equity firms and Worldpay are reportedly the most logical potential buyers of the point-of-sale (POS) and commerce platform.

Jefferies analyst Trevor Williams wrote in a note Wednesday (Sept. 25) that along with those potential buyers, Fiserv, Global Payments and Shift4 Payments are less likely potential buyers, Seeking Alpha reported Thursday (Sept. 26).

With mergers and acquisitions (M&A) speculation heightened by Lightspeed’s Wednesday confirmation of media reports that it is conducting a strategic review, BMO analyst Thanos Moschopoulos raised his target price on the company from $18 to $20, according to the report.

“We’ve raised our target price based on our view that the stock could be worth considerably more on a takeout, given the potential scarcity value associated with [Lightspeed’s] size/scale, its depressed valuation, and its future earnings power as payments penetration continues to ramp,” Moschopoulos wrote, per the report.

Lightspeed responded to media reports of a potential sale of the company Wednesday by issuing a statement saying that it periodically undertakes a strategic review of its business and that it does not intend to disclose more information except as required by its regulatory obligations.

“Lightspeed periodically undertakes, and is currently conducting, a strategic review of its business and operations with a view to realizing its full potential,” the company said in its statement. “In this context, the company has engaged, and may continue to engage, in discussions relating to a range of potential strategic alternatives.”

Reuters reported Wednesday that Lightspeed was working with a financial adviser to explore options, including a potential sale, and that potential could include private equity firms.

It was reported Thursday (Sept. 26) that private equity buyouts are forecast to pick up, driven by lower interest rates and by the capital these firms have on hand and a limited amount of time to invest.

Meanwhile, Worldpay said Feb. 1 that it “plans to pursue strategic acquisitions across verticals and geographies to further enhance its ability to serve clients and expand its market opportunities.”

Worldpay made the announcement on the same day it became an independent company upon the completion of its sale to private equity firm GTCR. It added that GTCR “committed an additional equity capital investment of up to $1.3 billion to pursue these opportunities.”