CSU - Constellation Software

[Liberty]

Thanks Liberty, appreciate your comments.  I think you are probably right.

 

But given the gradient between me and them (as insiders and smarter than me), their actions do give me pause.  Especially when the stock trades at a 10% premium to their signal.  And when it refuses to be concerned (so far) by a roll-up returning capital.

 

You should be skeptical, it's the right posture.

 

I think the return of excess cash is both a sign that there probably aren't huge deals in the near term, but it's also a good sign on discipline. As they often said, it's easy to deploy capital. They could deploy all they had and more if they wanted to, could probably lever up to 5x and deploy all of that on top of it. What's hard is deploying capital at their high hurdles, and the fact that they'd rather return the cash than lower their standards (which the market would reward in the short term because revenue growth would be huge and it would take a while for the ROIC to come down and for people to realize what's going on) to me shows that they are sticking to the plan. That's pretty rare to see.

[sane]

Agree the discipline is rare.  But not a surprise for anyone who knows them or has studied them.  That is a large part of why we are here, surely?  So I would have expected the negative signal to have dominated the positive one, and the stock to be lower.  Oh well.

[Liberty]

Agree the discipline is rare.  But not a surprise for anyone who knows them or has studied them.  That is a large part of why we are here, surely?  So I would have expected the negative signal to have dominated the positive one, and the stock to be lower.  Oh well.

 

How many people do you think took the time to really study them, read all the letters, etc? I don't think most market participants have done that.

 

I think the market just likes fat dividend cheques and that the recent quarter was so good that the momentum is hard to counter, even with the stock-sale plans.

[Liberty]

ACCEO news:

 

https://www.prnewswire.com/news-releases/citcon-and-acceo-partner-to-enable-alipay-and-wechat-pay-acceptance-for-more-north-american-retailers-300814643.html

 

CITCON, a leading cross-border mobile payment and marketing platform has teamed up with ACCEO, a leader in banking, business software, SaaS solutions and cloud computing. ACCEO's direct-to-processor payment architecture will now accept the two largest mobile payment options in the world, China's WeChat Pay and Alipay. [...]

 

The partnership presents a huge opportunity for both companies. Together Alipay and WeChat Pay have over 1.3 billion users. China is the world's top mobile payment market with an estimated $12.8 trillion in transactions in 2017. Every year millions of tourists from China visit North America, giving ACCEO retailers a distinct advantage in accepting these tourists' favorite and most trusted payment option.

[Liberty]

Jonas acquisition :

 

https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Announces_the_Acquisition_of_Green

 

H/t @pearnick

[Liberty]

Acquisition in the Wine retail sector!

 

https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Acquires_WineFetch,_Inc

 

WineFetch provides cutting-edge e-commerce websites and apps for wine and spirit stores that are easy for both retailers and customers to integrate and use.

Founded in 2004 and based in Chapel Hill, NC, USA, WineFetch helps brick and mortar wine retailers migrate their business digitally to better serve their customers, increase their customer base and retention to drive revenue. WineFetch’s user experience and interface makes it easy for clients and their customers to use. WineFetch also captures customer data to help you better understand your customers and proactively cater to their needs and wants.

 

And another one:

 

https://www.volarisgroup.com/news/article/delta-logic-joins-volaris-group

 

Based in Sursee, Swizterland, Delta Logic provides a comprehensive case management solution, called Tribuna, to courthouses and prosecutors throughout Switzerland.

 

The Tribuna solution helps to move approximately 40,000 people through the Swiss justice system on an annual basis. Its core functionality provides full case management for everything from offense to verdicts, along with accounting and reporting functionality. The solution is used by more than 3,000 users daily.

 

And another one at Home Builder:

 

https://www.prnewswire.com/news-releases/constellation-homebuilder-systems-to-redefine-the-home-building-landscape-through-newhomelistingservicecom-acquisition-300817236.html

 

acquired NewHomeListingService.com (NHLS™), a leader in new home listings, to connect buyers, builders and real estate agents. 

 

NewHomeListingService.com is an online SaaS solution to help homebuyers find new homes and condos faster, help builders find prospective buyers easily, and help real estate agents work effectively with both builders and buyers. "This acquisition provides a growth opportunity for both businesses and supports our strategy to help builders manage their business more successfully. Promoting new homes and condos is easier than ever before," says Chris Graham, Vice President of Constellation HomeBuilder Systems. "As builders look for more effective ways to connect with homebuyers, we will be well-positioned to support them on that journey." 

 

NewHomeListingService.com will be integrated with NEWSTAR, FAST and BuildTopia enterprise resource planning solutions from Constellation HomeBuilder Systems

 

h/t @pearnick

[Liberty]

https://www.csisoftware.com/docs/default-source/press-releases/cunningham-press-release-vice-chair.pdf

 

Lawrence Cunningham named vice-chairman of CSU.

[Liberty]

There's a 30 minute video of CSI's CFO speaking at the Scotia TMT conference yesterday available online. Very interesting talk.

 

I think this link should work, but I don't know how long the video will stay up:

 

https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=18D07014-3BF9-4203-9C4A-59DDD18A90C0&Referrer=https%3A%2F%2Fwww.telus.com%2Fen%2Fabout%2Finvestor-relations%2Finvestor-events%2Fscotiabank-2019-tmt-conference

 

The CFO basically straight-up confirmed that Mark Leonard's share sale plan is just a way to signal to the market.

[khturbo]

Awesome, thanks for sharing!

[Liberty]

CSU in Pakistan!

 

https://fp.brecorder.com/2019/03/20190323457871/

 

http://contour-software.com

 

Contour Software, is registered with the SECP and PSEB since its beginnings in 2010.

 

While groundwork for its inception started as early as 2008, with pilot projects performed over an 18 month period in order to prove the concept, Constellation’s acquisition of Gladstone PLC (now Gladstone MRM) culminated in the launch of Contour. 

 

While Gladstone had had a small team in Karachi since 2007, Contour’s birth resulted in a tenfold increase in headcount, over the first three year period. Today, as many as 80 Constellation departments have teams located at the Contour offices in Karachi, Lahore & Islamabad.

[villainx]

There's a 30 minute video of CSI's CFO speaking at the Scotia TMT conference yesterday available online. Very interesting talk.

 

I think this link should work, but I don't know how long the video will stay up:

 

https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=18D07014-3BF9-4203-9C4A-59DDD18A90C0&Referrer=https%3A%2F%2Fwww.telus.com%2Fen%2Fabout%2Finvestor-relations%2Finvestor-events%2Fscotiabank-2019-tmt-conference

 

Great.  Really helpful.

[Liberty]

New acquisition at TSS:

 

https://www.totalspecificsolutions.com/about-us/transaction-updates?tid=39

 

Total Specific Solutions has taken its first steps into the mobility and personal transport vertical with the acquisition of Korton Software BV, a supplier of software solutions for mobility of specific target groups. With the acquisition, TSS strengthens its portfolio of software solutions for municipalities who are responsible for taking care of the transportation needs of special target groups....

 

Korton Software was founded in 1997 and is a supplier of a specialized software suite for mobility and personal transport. The software connects the passenger, transporter, planner, and the client. Korton ‘Personeelsplanner’ (Staff planner) is used in the mobility sector as well as the leisure and hospitality market for the efficiency of registration and the communication of staff schedules and work times.

The primary product, Korton Regie, is an end-to-end software suite developed for the transportation of specific target groups.

 

Looks a bit larger than usual.

 

h/t @pearnick

[Liberty]

New acquisition:

 

https://www.prweb.com/releases/constellation_real_estate_group_acquires_mortgage_builder/prweb16208056.htm

 

Founded in 1999, Mortgage Builder provides industry-leading loan origination software to mortgage banks, community banks, credit unions and other financial institutions with software solutions that include: loan origination, servicing, relationship management, document management, and a production portal.

 

Looks like it could be a decent-sized one:

 

 

Revenues estimated at $31.4m

[sane]

When they talk hurdle rates for acquisitions are these pre-tax or post-tax?

 

Anyone got a live link for the CFO's Scotia presentation?  I missed the one Liberty kindly posted.  Thanks.

[Liberty]

New acquisition by TSS in Sweden:

 

https://www.totalspecificsolutions.com/about-us/transaction-updates?tid=40

 

FDT is a vertical market software (VMS) company that is part of the Swedish white goods and consumer electronics retail chain the Elon Group that operates in Sweden, Denmark, Finland, Norway, and Iceland.

 

FDT is one of the market leaders in Sweden for retail solutions. Their software suite consists of Excellence Retail, a modern cloud-based POS solution with the latest integrations for payments. Avance is a (back-office) ERP system that covers all the processes within a retail store or chain. Their new ERP product Sellus is a web-based back-office system that combined with the POS solution offers the flexibility to integrate into other directions as well.

 

h/t @pearnick

[sane]

Liberty - do you know if Jamal was referring to pre-tax or post tax hurdle rates when he was reported to have recently said "we have a something in the low 20s for a larger and something in the higher 20s for our regular acquisition"?  Thanks.

[Liberty]

Liberty - do you know if Jamal was referring to pre-tax or post tax hurdle rates when he was reported to have recently said "we have a something in the low 20s for a larger and something in the higher 20s for our regular acquisition"?  Thanks.

 

I don't know about his specific comment, but if you go back to the president's letters where they calculate ROIC, they use average invested capital and adjusted net income (which is basically Cash EPS, with amortization added back, very very close to FCF), so that's after tax.

[Liberty]

Another TSS acquisition:

 

https://www.totalspecificsolutions.com/about-us/transaction-updates?tid=41

 

Onetrail focuses on trading and retail companies, and public and governmental organizations. Product and order data of the purchasing and selling companies is updated continuously in real time by Onetrail via its Trading Partner Network. During the past years not only the advanced EDI (Electronic Data Interchange) processes have been developed but also several online applications, enabling dozens of parties to be connected to the data exchange network each month. Onetrail focuses more and more on onboarding hundreds of retail suppliers at a high pace.

 

h/t @pearnick

[Liberty]

Proxy has proposal to increase max size of the board from 10 to 15, to give flexibility to add directors over time. It'll be interesting who they find over time..

[Liberty]

Acquisition at Jonas:

 

https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Announces_the_Acquisition_of_mJobTi

 

“The acquisition of mJobTime further establishes Jonas as a global leader in the construction vertical. mJobTime’s time tracking software enables businesses to improve managing and tracking their field resources and streamlines control and processes, which in turn helps businesses save time and money. We are excited to welcome the team at mJobTime to the Jonas Construction Group as we work together to grow their business and help them achieve their professional milestones.”

...

Founded in 1994 and headquartered in Beaumont, TX, USA, mJobTime provides customizable, scalable time-tracking software to help businesses improve on their processes and efficiencies, while decreasing their costs and expenses. mJobTime has received many accolades including being named one of the 50 Hottest Companies by Construtech Magazine, and more recently, being named the Technology Enabler for Construtech Vision award winner, Heico Construction Group.

 

h/t @pearnick

[villainx]

Pace of acquisition seems to be stepping up.  But not super big?

[Liberty]

Pace of acquisition seems to be stepping up.  But not super big?

 

 

And there's that distressed asset that they basically got for free that isn't showing there, but that is likely to provide nice returns too since it seemed decently big.

[tenyearsout]

Are the Q1/2019 numbers legitimate?  Are they from the company? 

Based on the acquisitions from @pearnick I would have guessed a higher number than 60

[Liberty]

Are the Q1/2019 numbers legitimate?  Are they from the company? 

Based on the acquisitions from @pearnick I would have guessed a higher number than 60

 

The "e" in front of them means estimate. The official numbers don't come out before the quarter is announced. This is the analyst's estimate.

[Liberty]

Harris acquisition:

 

https://www.newswire.ca/news-releases/pg-solutions-announces-the-acquisition-of-tailbase-inc--874000814.html

 

N. Harris Computer Corporation (« Harris ») announced  today that PG Solutions, a proprietary subsidiary, acquired Tailbase Inc. (Tailbase), a supplier of innovative and completely optimized, web technology solutions designed for furniture, major appliance, consumer electronic and bedding retailers and manufacturers. Tailbase offers a web site solution that includes high-end product catalogues with improved content supported by an effective marketing strategy.

 

Tailbase customers will now join the more than 40,000 North American Harris customers.

 

"Tailbase's desire to grow and the synergies that will be generated by the pooling of our activities have been complementary factors in bringing our two companies closer together. PG Solutions welcomes all Tailbase employees and is committed to continuing business relationships with its customers," said PG Solutions Executive Vice President, Natasha Villeneuve.

 

https://www.tailbase.com

 

h/t @pearnick