My take on VEND acquisition by LSPD

I continue to like LSPD’s acquisitions. I detailed their strategy here,…

LSPD has detailed their acquisition strategy and it boils down to the following.
1) Acquire for geography
They bought access into South Africa with Ikentoo, Gastrofix for Switzerland, germany and austria
2) Acquire customers
Chronogolf gave them a golfing vertical, Upserve and Shopkeep gave them some tech but lots of customers.

They continue to acquire in line with the strategy. This acquisition gives LSPD new customers AND new geography in asia pacific where VEND is a leading solution. Reviews for VEND are reasonable but not amazing. Some of the newer ones are better.

What I like.

  1. cost about 350 million to acquire about 34 million of revenue. In line with previous acquisitions at a P/S of around 10.

  2. Gained about 10% revenue for about 5% of dilution

  3. Gained lots of GTV ~7 billion and 20k of customers. VEND does not have a payment processing solution so LSPD have another 7 billion of GTV convert over to their payments solution.

  4. GTV/Rev ratio: Vend 205, Upserve 150, shopkeep 140. This means VEND merchants have 205 dollars of GTV for each dollar of revenue that VEND gets from them. This implies that LSPD will be able to upsell significantly more to customers brought from vend than they were from Upserve or Shopkeep.
    Payments will probably be the main driver but also additional modules.

All in all the numbers look good, geography looks good. I don’t know enough about VEND to understand if any new tech will be integrated into the LSPD stack. If anyone has insight, please weigh in.

LSPD seems to be acquiring using approximately half cash and half stock. If they continue that then they have 700 million in cash left so they could reasonably buy another billion dollars worth of companies or around another 100 million in revenue before I would think they think about raising capital again.