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CSU - Constellation Software


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One more at TSS, this time in France:

 

https://www.totalspecificsolutions.com/about-us/transaction-updates?tid=48

 

Leading software provider TECHNIDATA offers mission-critical solutions that cover all the laboratory disciplines: biochemistry, hematology, immunology, microbiology, blood banking, histology/cytology, genetics, and biobanking.

 

h/t @pearnick

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New acquisition by Harris in Austria:

 

https://www.mquadr.at/en/news-19100100,mquadr.at-is-now-part-of-the-Harris-group

 

With the acquisition of mquadr.at, the Harris Group is extending its own expertise by adding solutions for Internet service and telecommunication providers (ISPs) as well as valuable development knowhow in the area of user-friendly consumer software for leading operating systems. As part of the larger company structure, SIV.AG will profit from this expertise as well. mquadr.at offers software solutions with which customers in the telecommunications sector can reach significant cost advantages via intelligent self-service. mquadr.at is the European market leader in this field. Customers include, among others, A1 Telekom Austria, Swisscom, Magenta Telekom, o2 Telefònica, UPC, Proximus, NetCologne ...

 

mquadr.at has established itself as the leading expert in Europe for innovative self-service software regarding modems, home networks and smartphones. Internet service providers (ISPs) and telcos form the target audience for the cutting-edge solutions, which they in turn deliver to millions of their consumers. The core product m2suite allows the users to manage their home network including their Internet access completely independently. This way, the ISPs reach massive reductions of service costs (especially for service desks) as well as an increase in service quality (reduced customer churn) and lasting user education.

 

In the 20 years of its company history, mquadr.at has made a name for itself especially by delivering highest quality products, technology expertise and quick project realisations. This has established mquadr.at as a reliable partner for innovation for over 50 customers in the telco sector.

 

h/t @pearnick

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New one at Jonas:

 

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

 

GuestVision Software was released into the marketplace, initially to the walk-in beauty salon chain market. Today, GuestVision is one of a few salon software packages flexible enough to span the breadth of the beauty industry with a focus on multi-national enterprises across cosmetology schools, salons, and barbershops. Today GuestVision offers not only software solutions but hardware, support, and consulting for an all-in-one stop for technology needs. GuestVision promises to continue providing innovation, exceptional service, and new technology to assist clients in all of their endeavors.

 

h/t @pearnick

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Acquisition at Vela:

 

https://velasoftwaregroup.com/vela-software-acquires-mosaic/

 

MOSAIC is an industry leading integrated petroleum economic, decline analysis, reserves management and budgeting solution. MOSAIC enables oil and gas companies to achieve greater standardization, faster execution, higher data confidence, and improved productivity – from projects and properties through to corporate reporting. MOSAIC has offices in Calgary and Houston and will now rely on Vela’s existing international locations to provide a global support reach.

 

h/t @pearnick

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New one at Harris:

 

https://www.bcms.com/gb/en-gb/article/canadian-investor-acquires-uk-healthcare-it-integrator-quicksilva

 

Quicksilva has been associated with prestigious projects in the public and private sectors, alongside a big focus on health and social care which built a long association with the NHS. Quicksilva’s interface to the NHS Spine* initiated Spine-in-a-Box, a test harness designed to mimic the functionality of the NHS Spine, enabling suppliers to have a practice run through before going through the compliance process of the Spine.

 

h/t @pearnick

 

Update: Another one at Harris, this one in Wyoming:

 

https://www.harriscomputer.com/en/news/?data-ipsquote-timestamp=1570420800&article=harris-healthcare-acquires-connecture-inc-

 

announced today that it has completed the acquisition of Connecture, Inc. (“Connecture”). Connecture provides SaaS based solutions for Medicare shopping and enrollment and serves customers including insurance carriers, insurance brokers and pharmacy benefit managers.

 

Connecture’s solutions complement Harris’ existing healthcare information technology portfolio. Harris will continue to develop, sell, implement and support Connecture’s applications.

 

h/t @pearnick

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Volaris acquisition:

 

https://www.volarisgroup.com/news/article/volaris-group-strengthens-foodservice-hospitality-vertical-with-acquisition

 

IndiCater Limited (“IndiCater”), a UK-based software provider of process management solutions to help manage the full spectrum of foodservice and hospitality back-office operations. IndiCater joins CaterTrax, a Volaris Group company, in the Foodservice & Hospitality vertical.

 

IndiCater’s comprehensive portfolio of solutions supports all operational aspects of a business, including finance, profit, employment, stock, recipe, menus, ordering, and procurement management. Over 4,000 system users manage their business and streamline operational processes with IndiCater’s flexible hospitality solutions. Major clients include market-leading contract caterers, buying groups, and distributors throughout the UK.

 

h/t @pearnick

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Has anyone ever looked at Upland Software? Figured some of the people who are familiar with Constellation are familiar with this company too. There was a VIC writeup on it.

 

https://valueinvestorsclub.com/idea/UPLAND_SOFTWARE_INC/0371366189/messages/151783#description

 

I’ve looked at them a few years ago and read that writeup. I don’t think the write up is correct in comparing them. Pretty different models. Not mission critical, using more debt and issuing more shares, etc.

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Has anyone ever looked at Upland Software? Figured some of the people who are familiar with Constellation are familiar with this company too. There was a VIC writeup on it.

 

https://valueinvestorsclub.com/idea/UPLAND_SOFTWARE_INC/0371366189/messages/151783#description

likely better to start another thread... Upland is pretty interesting though to Liberty's point a very different roll-up

 

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New one by TSS in the Netherlands:

 

https://www.totalspecificsolutions.com/about-us/transaction-updates?tid=49

 

For over 25 years, Microcash has been supplying the Dutch specialty retail sector with store- and warehouse automation solutions. The Microcash POS and WMS solution cover the end-to-end need of single and multi-store retailers: from article and stock management, to purchase management, to customer retention options as well as having extensive cash register functionalities.

 

h/t @pearnick

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Acquisition by Perseus in Texas:

 

https://csiperseus.com/news/perseus-group-adds-horizon-retail-solutions-to-its-expanding-portfolio-of-software-businesses/

 

Horizon Retail Solutions, LLC, an ERP software provider for large farm, ranch and home specialty retailers.

 

Established over 20 years ago, Horizon supports customers across the Midwest, from Wyoming to Missouri. Horizon’s solutions help retailers with store management, point of sale, accounting, inventory, warehouse and distribution centre management.

 

h/t @pearnick

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Volaris acquisition in the UK:

 

https://www.volarisgroup.com/news/article/volaris-group-acquires-worldwide-chain-stores

 

acquired Worldwide Chain Stores (WCS), a leading supply chain execution company providing inventory management expertise to Grocery Retailers and Wholesalers.

 

WCS offers grocery retailer and wholesalers proven, easy to use and feature-rich warehouse management systems. “WCS has built a reputation for reliability, great customer service and market-leading innovation over the past 50 years,” said Joshila Makan, CEO of WCS. “Now as part of Volaris, we can invest even further and faster in strengthening our product and growing our platform for the mutual benefit of all of our customers, partners and hardworking team.”

 

Zoominfo shows 42 employees and $8.1M revenues

 

h/t @pearnick

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Has anyone ever looked at Upland Software? Figured some of the people who are familiar with Constellation are familiar with this company too. There was a VIC writeup on it.

 

https://valueinvestorsclub.com/idea/UPLAND_SOFTWARE_INC/0371366189/messages/151783#description

 

I’ve looked at them a few years ago and read that writeup. I don’t think the write up is correct in comparing them. Pretty different models. Not mission critical, using more debt and issuing more shares, etc.

 

I've owned this since late last year.  It's not Constellation in quality (measured by stickiness of customers, niche verticals, accounting conservatism, management, reputation etc) , but I think the upside from here is comparable to higher, simply because they use leverage like Transdigm does though they're not as aggressively levered, and of course they're a tiny fraction of the size of CSU by revenue (5% or so). Enterprise software is sticky obviously and recurring revenue is high so leverage is kind of a no brainer. It's a Vista or PE model.

 

The management is decent and experienced and incentivized and thinks about capital allocation well.  I could do without their need to constantly throw out/invent new sales-y, jargon-y terms like "lights out, best-in-class", "committed to customer excellence" with every call.  Seems to be a thing in software world though. They are a clearing house for VC funds.  VC funds need upland and other companies like them to liquidate their funds. Upland fires and outsources developers.  They use crossover and devfactory to get this done (owned by ESW, who incidentally is an owner).

 

You could make a case that since they're coming off a smaller base, that if present circumstances continue, (ability to redeploy all cash + debt into acquisitions) then you have a 30% compounder for the next several years. Organic revenue is higher than CSU's for the moment but of course these guys are all cloud based while CSU has a majority legacy license/maintenance type model. Organic revenue in software, as we all know, is magic, especially the recurring kind.

 

at 20x Adj. EPS, it's not terribly expensive. Oh and they get to buy a lot of companies with NOLs simply because they're buying money losing things out of a VC portfolio. If you scan Gartner for some of their products, they get good reviews, though I doubt any of them are leaders in their niche.

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Acquisition in New Zealand by Jonas:

 

https://www.pacsoftmms.com/jonas-software-acquires-marina-management-experts-pacsoft/

 

acquisition of marina management software specialists Pacsoft International.

 

 

Headquartered in Auckland, New Zealand’s ‘City of Sails’, Pacsoft is best known for its PacsoftNG software used by marina, boatyard and shipyard managers to operate and manage their facilities. ...

 

Pacsoft has grown steadily since it launched PacsoftNG in 1999. The software is now used in 20 countries by businesses ranging from small marinas and boatyards to major harbours with thousands of berths.

 

PacsoftNG makes it simple for marina, boatyard, and shipyard managers to efficiently run all aspects of their business, including operations, administration, accounting, management and business analysis.

 

It offers comprehensive tools for management of services such as berth rental and makes administering and charging for ancillary services and utilities simple. It also offers add-on modules that make it easy to manage a schedule of boat lifters and hard stands and effectively create and monitor job quotes, invoices, job costings, and work in progress.

 

h/t @pearnick

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Looks like a big acquisition in Brazil for Volaris:

 

https://berkerynoyes.com/berkery-noyes-represents-apdata-in-its-sale-to-volaris-group-a-constellation-software-company/

 

Founded in 1984, Apdata has a long history and deep experience in software development and outsourcing capabilities for Human Capital Management (HCM). Its fully integrated, propriety “all in one” Technology (*GA – Global Antares) provides simplicity, productivity, mobility and automation, tailored specifically for both international and domestic HCM clients, streamlining the HR process into a single, easy-to-use technology. The Company operates with small, medium, and large organizations in different segments and has a portfolio of more than 730 clients.

 

Volaris Group, a wholly owned division of Constellation Software Inc. (TSX:CSU), acquires, strengthens, and grows vertical market technology companies. Constellation has a market cap of nearly $28 billion and a portfolio of software businesses with over 125,000 customers throughout more than 100 countries.

 

-730 clients

-423 employees (Linkedin)

-Offices in Brazil and FL

 

h/t @pearnick

 

ACCEO had around 1000 employees, so that's almost half as big on that metric.

 

More context on potential size:

 

 

Apdata is the num. 2 HCM vendor in Brasil, maybe N. 10 global?

 

2016-2017 Revenue Growth: 12% YoY

 

2018 Revenue ~US$20M (R$80M)

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