The Canadian company Lightspeed Commerce has been in play for months, with reports about a potential acquisition swirling around the point-of-sale software firm.

This week, analysts at the financial firm William Blair posited that the Montreal-based company might be a “good strategic fit” with a U.S. counterpart, Shift4 Payments, per a Monday note to their investment clients. Both industry players provide payments processing services and technology to merchants, with varying vertical specialties and different regional strengths.

Allentown, Pennsylvania-based Shift4 has shown that it can successfully acquire payments peers and shift their operations to its SkyTab software as merchant clients migrate to its platform as well, the William Blair note focused on Shift4 said.

“Lightspeed is not a perfect fit, in our view, as it is approaching 40% penetration of its next-generation One Lightspeed POS solution,” the William Blair note explained. “That said, Lightspeed faces significant volume churn, evidenced by flat second-fiscal-quarter (gross merchandise volume). We accordingly believe that Shift4 could quickly upgrade merchants to its leading SkyTab POS and accelerate payments adoption, as it has done at other acquired companies.”

Lightspeed, which also provides e-commerce payments services, acknowledged last month that it’s mulling a new course. The company “is currently conducting, a strategic review of its business and operations with a view to realizing its full potential,” it said in the Sept. 25 press release. “In this context, the Company has engaged, and may continue to engage, in discussions relating to a range of potential strategic alternatives.”

Shift4 has leaned into acquisitions

Shift4 has been floated as a potential acquirer of Lightspeed in the past, as have other payments processors Worldpay and Fiserv.

To be sure, the analysts don’t purport to have any knowledge of a deal in the offing. William Blair analyst Andrew Jeffrey underscored in an emailed follow-up comment responding to a request for further insights that the possibility was “strictly an analysis based on a theoretical combination.”

A spokesperson for Shift4 declined to comment on speculation, saying Shift4’s earnings report scheduled for Tuesday would provide an update on the company’s acquisition strategy.

Past Shift4 acquisitions include businesses around the world. In June, the company said in a press release it had purchased a majority stake in the German POS technology provider Vectron Systems, and at the same time added that it had finished a previously announced $250 million deal to buy Atlanta-based Revel Systems.

In addition to its own past acquisition spree, Shift4 CEO Jared Isaacman has said in the past that he also considered taking Shift4 private and last year considered acquisition interest.

Lightspeed shifts growth focus, cancels investor day

Fueling speculation about a potential transaction, Lightspeed executives told analysts last week during an earnings report webcast that the company would postpone an investor day it had previously scheduled for Nov. 20. Lightspeed didn’t respond to a request for comment.

Lightspeed’s CEO,  Dax Dasilva, also explained how the company would shift its growth plans to focus on the North American retail sector and the European hospitality segment as a result of its “ongoing strategic review of our operations.”

“We've decided to focus on retail North America and European hospitality, because they are our largest and fastest growing customer base, accounting for the majority of revenues and growing faster than our overall business; have compelling unit economics; represent our strongest competitive position; are our most compelling product market fit; and have our highest close rates,” Dasilva said on the webcast.

Lightspeed’s international footprint also makes it an attractive potential addition to Shift4, the William Blair analysts said.

“We contend that Lightspeed would improve Shift4’s competitive position by accelerating its move into Europe, where 50% of Lightspeed’s customers are located,” the William Blair note said. “Lightspeed’s customers also oversample to retail, at 63%, complementing Shift4’s hospitality-heavy footprint. Lastly, we like that Lightspeed has emphasized larger, more complex merchants, which we think Shift4 could quickly monetize.”

When asked for comment, Benchmark analyst Mark Palmer also said he thought a Shift4 acquisition of Lightspeed “could make sense.” “Lightspeed’s focus on smaller retail customers would provide Shift4 with a new vertical, while the company’s strength in the European hospitality segment could help Shift4 to accelerate its efforts to expand its footprint on the continent,” Palmer said by email Monday.