Constellation Software is a Canadian diversified software company. It is based in

Toronto Toronto ( , locally pronounced or ) is the List of the largest municipalities in Canada by population, most populous city in Canada. It is the capital city of the Provinces and territories of Canada, Canadian province of Ontario. With a p ...

, Canada, is listed on the

Toronto Stock Exchange The Toronto Stock Exchange (TSX; ) is a stock exchange located in Toronto, Ontario, Canada. It is the List of stock exchanges, 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in th ...

, and is a constituent of the

S&P/TSX 60 The S&P/TSX 60 Index is a stock market index of 60 large companies listed on the Toronto Stock Exchange. Launched on December 30, 1998 by the Canadian S&P Index Committee, a unit of S&P Dow Jones Indices, the index has components across nine secto ...

. The company was founded by Mark Leonard, a former

venture capitalist Venture capital (VC) is a form of private equity financing provided by firms or funds to startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in terms of number ...

, in 1995. It went public in 2006, and now has over 56,000 employees spread over six operating segments.

Business

The company's business strategy is to acquire software companies, and then hold them for the long term. It has acquired over 500 businesses since being founded. 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). Most of its acquisitions are relatively small (for less than $5 million), although the company has indicated that it may pursue larger acquisitions in the future. For instance, Constellation acquired Acceo Solutions for $250 million in January 2018, its then second-largest acquisition. In March 2022, Constellation Software acquired Allscripts’ hospital business unit for $700m. As per the agreement, Allscripts will receive a fixed amount of $670m plus $30M as a performance bonus at the closing of the deal. 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, especially from

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

and

hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...

s. As of 2016, 67% of revenue was from customers in the

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, pu ...

, while the other 33% was from customers in the

private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

. 12% of revenue was from Canada, 52% from the US, 30% from Europe, and 5% from the rest of the world.

Operating segments

Constellation Software has six operating segments: * Volaris Group: focuses on acquiring software businesses serving various areas, including

agri-business Agribusiness is the Industry (economics), industry, Business, enterprises, and the field of study of Agribusiness value chain, value chains in agriculture and in the Bioeconomy, bio-economy, in which case it is also called bio-business or bio-ent ...

, financial services, and education. It has more than 150 constituent software businesses. * Harris Computer Systems: primarily serves the public sector, including utilities, education, and healthcare, as well as the private technology, retail technologies, payment solutions and insurance sectors. It has over 100 constituent software businesses. * Jonas Software: acquires niche software businesses or companies in the vertical market software industry. Focuses on B2B and has a heavy presence in North America, Europe, South America, Australia and New Zealand. Has 140 companies in its portfolio across 40+ major verticals in 2022, primarily in the hospitality and construction sectors. * Vela Software: operates 8 divisions, primarily focuses on the industrial sector, including oil and gas and manufacturing * Perseus Operating Group: operates 56 companies in a variety of industries, including home building, pulp and paper, dealerships, finance, healthcare,

digital marketing Digital marketing is the component of marketing that uses the Internet and online-based Information technology, digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and service ...

, and real estate. * Total Specific Solutions: focuses on software companies in the UK and Europe. Total was acquired in December 2013 for $360 million. In January 2021, this operating segment was spun-off to Topicus.com.

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

Management team

As of May 2024, the management team is composed of * Mark Leonard – President * Jamal Baksh –

Chief Financial Officer A chief financial officer (CFO) is an officer of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its finances; i.a.: financial planning, management of financial risks, ...

* Mark Miller – Director, COO and

CEO A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

* Bernard Anzarouth – Chief Investment Officer * Farley Noble - Senior Vice President, Large Acquisition Group

References

{{Authority control Software companies of Canada Companies listed on the Toronto Stock Exchange Software companies established in 1995 Canadian companies established in 1995 1995 establishments in Ontario Companies based in Toronto 2006 initial public offerings