Author: The Canadian Press

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Lightspeed Commerce Inc. is cutting about 280 jobs, less than two months after its founder returned to the helm of the Montreal-based technology company.

After integrating the company’s many acquisitions, “Lightspeed is now entering a new phase, one focused on profitable growth to capture the opportunity in front of us,” said founder and chief executive Dax Dasilva.

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“This means making some hard decisions, like reducing spending in specific areas such as head count, to allow for investments in others,” Dasilva said in a statement.

“As we navigate through this transition, we acknowledge the invaluable efforts of every team member who has played a role in our journey.”

The cuts represent about 10 per cent of Lightspeed’s staff-related operating spending, the company said.

In addition, Lightspeed said it has undertaken several other cost reduction initiatives in facilities and operations. It expects that the majority of the restructuring charges will be incurred in the first quarter of its 2025 financial year, which ends on June 30.

The company also announced that its board has authorized the repurchase of up to 10 per cent of its public float of shares.

Dasilva served as its CEO for the bulk of the company’s history, having founded it in 2005, but became executive chairman when he turned the reins of the company over to JP Chauvet in February 2022.

Dasilva returned to the CEO role in February this year, when Chauvet left the company.

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Since his return, he’s been focused on profitability and on boosting Lightspeed’s share price, which he recently said hasn’t budged since he took the company public in 2019.

“One of our top shareholders said to me, ’I want to see Lightspeed be a real business. It can’t be growth at all costs with large losses just to capture market share forever. When is this company going to have a balance of growth and profitability?”’ Dasilva said at the CIX Summit in Toronto last week.

He said Lightspeed made its sales summit virtual instead of in-person as a way of cutting costs and also changed its work-from-home policies so it can reduce spending on food in its offices.

Last November, Lightspeed reached positive adjusted earnings before interest, taxes, depreciation and amortization for the first time. As he made his return, Dasilva said the company’s priority is profitability, and as part of that he plans to put less of a focus on large mergers and acquisitions.

National Bank of Canada analyst Richard Tse said in a note that the moves announced Wednesday by Lightspeed are positive.

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“With investor appetites having shifted to more balanced (profitable) growth, we think this move should alleviate concerns that the company was reverting to aggressive investment and potentially resuming its former acquisition path,” he wrote.

However, Tse added that it’s too soon to tell whether the company’s focus on larger accounts will prove successful “beyond the current payment push,” and maintained the price target for the company at US$20.

Analyst Daniel Chan of TD Cowen said the cost cuts will slightly reduce operating expenditures, and the restructuring “is a clear sign of Mr. Dasilva’s high focus on profitability.”

Chan said his firm continues to believe Lightspeed could be a candidate for a take-private deal.

“Improving margins could also make Lightspeed more attractive to potential buyers,” he wrote.

Lightspeed shares closed up 5.46 per cent on the Toronto Stock Exchange, at $19.89.

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Indigo Books & Music Inc. has agreed to be taken private after agreeing to a sweetened offer from a holding company connected to its largest shareholder.

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The retailer says its agreement will see Trilogy Retail Holdings Inc. and Trilogy Investments L.P. pay $2.50 per share in cash for the stake in Indigo they do not already own.

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The Trilogy companies, owned by Gerald Schwartz, the spouse of Indigo chief executive Heather Reisman, offered Indigo $2.25 per share in cash in February.

Indigo did not say what caused Trilogy to boost its offer but noted the new price reflects a 69 per cent premium on the share price of $1.48 that Indigo had when Trilogy first made its bid.

Shares in the retailer, which announced the agreement after the close of trading, ended Tuesday down five cents at $2.01 on the Toronto Stock Exchange.

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Indigo says an independent committee of its board of directors recently unanimously recommended the company accept Trilogy’s latest offer.

If shareholders agree to the deal during a May vote, Indigo expects the transaction to close in June and its shares to be delisted from the Toronto Stock Exchange sometime after.

“We believe that this transaction will provide minority shareholders with a substantial premium for their shares following some challenging years for the business, while also ensuring a strong future for Indigo with full ownership by a team that has demonstrated a deep commitment to Indigo’s mission,” Indigo board chair Markus Dohle said in a statement.

The last two years have seen Indigo encounter a ransomware attack that downed its website for a lengthy period and the departure of several board members, including one who said she experienced a “loss of confidence in board leadership.”

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Amid these challenges, Indigo’s founder, Reisman, returned to the company’s helm after retiring in the summer of 2023.

Indigo announced layoffs earlier this year as part of ongoing efforts to streamline its operations.

The company said at the time that the cuts were part of the company’s strategic plan meant to return the business to profitability.

Through the Trilogy firms, Schwartz is the controlling shareholder of Indigo. He owns around 56 per cent of the company’s issued and outstanding common shares, while another 4.6 per cent belong to Reisman through a different holding company.

Trilogy has said it’s not interested in selling any of its shares.

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