Constellation Software

Constellation Software is a Canadian diversified software company. It is based in Toronto, Canada, is listed on the Toronto Stock Exchange, and is a constituent of the S&P/TSX 60.

Constellation software Inc.
TypePublic
IndustryIT services
Founded1995 (1995)
FoundersMark Leonard
Headquarters
Toronto, Ontario
,
Canada
Area served
Worldwide
Key people
  • Mark Leonard (President and Chairman)
  • Jamal Baksh (Chief Financial Officer)
  • Mark Miller (Chief Operating Officer)
ServicesCustom Computer Programming Services
Revenue US$ 3.1 billion (2019)[1]
US$ 0.4 billion (2019)[1]
Total assets US$ 2.9 billion (2019)[1]
Total equity US$ 0.9 billion (2019)[1]
Number of employees
16,000
Websitewww.csisoftware.com

The company was founded by Mark Leonard, a former venture capitalist, in 1996.[2] It went public in 2006,[3] and now has 13,000 employees[4] spread over 6 operating segments.

Business

The company's business strategy is to acquire software companies, and then hold them for the long term.[3] It has acquired over 500 businesses since being founded.[3] It focuses on vertical market software companies (i.e. those that create software for a particular industry or market, as opposed to creating software usable for a wide variety of markets).[5] Most of its acquisitions are relatively small (for less than $5 million),[5] although the company has indicated that it may pursue larger acquisitions in the future.[3] For instance, Constellation acquired Acceo Solutions for $250 million in January 2018, the second-largest acquisition in its history.[6] Although the company has experienced great success with this strategy in the past (its stock has increased 30 times since its IPO in 2006), it has experienced more competition in acquiring companies in recent years,[3] especially from private equity and hedge funds. As of 2016, 67% of revenue was from customers in the public sector, while the other 33% was from customers in the private sector.[7] 12% of revenue was from Canada, 52% from the US, 30% from Europe, and 5% from the rest of the world.[7]

Operating Segments

Constellation Software has six operating segments:[8]

  • Volaris Group: focuses on acquiring software businesses serving various areas, including agri-business, financial services, and education. It has approximately 45 constituent software businesses.[9]
  • Harris Computer Systems: primarily serves the public sector, including utilities, education, and healthcare.[10] It has 31 constituent businesses.
  • Jonas Software: operates 70 companies, primarily in the hospitality and construction sectors.[11]
  • Vela Software: operates 8 divisions, primarily focuses on the industrial sector, including oil and gas and manufacturing
  • Perseus Operating Group: operates in a variety of industries, including home building, pulp and paper, and real estate
  • Total Specific Solutions: focuses on software companies in the UK and Europe. Total was acquired in December 2013 for $360 million.[5]

Controversy

In 2016, the founder of Innoprise Software sued Harris Computer Systems for giving away its software for free, thus reducing the value of a revenue-sharing agreement.[12][3] The founder and chairman of Constellation Software, Mark Leonard, has maintained a low profile, declining media interviews and making few public appearances.[5]

In mid-2018, the company cancelled its quarterly earnings calls, a highly unusual step for a public company.[6] Analysts suggest the company took this step because it was worried about leaking information about potential acquisitions to its competitors.

Management Team
  • Mark Leonard - President & Chairman of the Board
  • Jamal Baksh - Chief Financial Officer
  • Mark Miller - Director, CEO & COO
  • Bernard Anzarouth - Chief Investment Officer

Source:[13]

References
  1. "CS" (PDF). CS. Retrieved 18 December 2019.
  2. PavelBuiko.co.uk. "» Management Team Constellation Software, Inc". www.csisoftware.com. Retrieved 2017-11-29.
  3. De Vynck, Gerrit. "Has Constellation Software's run of rapid growth come to an end?". The Globe and Mail. Retrieved 2017-11-30.
  4. PavelBuiko.co.uk. "» Overview Constellation Software, Inc". www.csisoftware.com. Retrieved 2017-11-29.
  5. Chidley, Joe (April 24, 2014). "Constellation Software's elusive CEO". The Globe and Mail.
  6. "Constellation Software keeps investors guessing by eschewing conference call". BNN. 2018-07-25. Retrieved 2018-08-14.
  7. "Constellation Software Inc. Q4 and Year End 2016 Results". Constellation Software.
  8. PavelBuiko.co.uk. "» Our Companies Constellation Software, Inc". www.csisoftware.com. Retrieved 2017-11-30.
  9. "Agri-Food". www.volarisgroup.com. Retrieved 2017-11-30.
  10. "Our Businesses". www.harriscomputer.com. Archived from the original on 2017-11-29. Retrieved 2017-11-30.
  11. "Jonas Software - Our Companies". www.jonassoftware.com. Retrieved 2017-11-30.
  12. "Innoprise Software's Lawsuit Against Harris Computer Systems (CSU) to Proceed to Jury Trial on June 13, 2016". MarketWired. April 26, 2016.
  13. "The Team". Official Website. Retrieved 1 June 2020.
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