CSU - Constellation Software

[chrispy]

Lots to chew on!

[choubris]

Interesting writeup on the company, including a model: https://www.the10thmanbb.com/investment-ideas/csutsx

[Liberty]

I wrote some of my thoughts about the new letter here, if anyone's interested:

 

https://libertyrpf.substack.com/p/92-mark-leonards-2021-letter-payments#:~:text=Mark%20Leonard%E2%80%99s%202021%20Shareholder%20Letter

[Liberty]

Perseus acquired R.O. Writer (US)

 

"a shop management software provider for franchise and independent auto repair shops"

 

"one of the market leaders in the industry"

 

"represents a platform investment for the Perseus Group"

 

Founded in 1989

100 employees (Zoominfo)

 

via @pearnick

[Liberty]

For those who haven't had a chance to attend Constellation Software AGMs in the past, I just noticed that there's 3 transcripts here (2020, 2019, and 2015):

 

https://app.koyfin.com/news/ts/eq-hc42hq

[Dustin T]

Excellent stuff, and I appreciate you keeping this on my radar I finally bought a couple of years ago, but should have bought sooner.

[Liberty]

Nice look at TSS M&A before and after CSU ownership:

 

 

[dabuff]

Any thoughts on buying via TSX: CSU vs OTCMKTS: CNSWF ?

Thanks!

[Liberty]

Any thoughts on buying via TSX: CSU vs OTCMKTS: CNSWF ?

Thanks!

 

If you can, why not buy on TSX? More liquidity, as it's the main place it trades.

[MattR]

Any thoughts on buying via TSX: CSU vs OTCMKTS: CNSWF ?

Thanks!

 

If you can, why not buy on TSX? More liquidity, as it's the main place it trades.

Do you think it is still a great buy at current prices? Seems like Mark and Jamal are a bit like Buffet and Munger only for Software.

[dabuff]

Liberty, are there any tax implications for buying on TSX vs the OTCMKTs?

[Libs]

Liberty:

 

Yeoman's work here, thank you. Having plowed through the thread, Mark's letters, etc........well, I normally don't indulge in investing regret, but missing this one for so long was bone-stupid! That said, I'm happy to join in size at these levels, and follow this rather elegant story for a long time.

 

I think they can maintain the current multiple as they continue to grow cash flow by 15% plus. That would be a very healthy return.

 

[Liberty]

Liberty, are there any tax implications for buying on TSX vs the OTCMKTs?

 

Not sure. I'm in Canada so never looked at that. ¯\_(ツ)_/¯

[Liberty]

Liberty:

 

Yeoman's work here, thank you. Having plowed through the thread, Mark's letters, etc........well, I normally don't indulge in investing regret, but missing this one for so long was bone-stupid! That said, I'm happy to join in size at these levels, and follow this rather elegant story for a long time.

 

I think they can maintain the current multiple as they continue to grow cash flow by 15% plus. That would be a very healthy return.

 

Welcome to the club! Kudos on getting through all of that, few do. You are a chosen one!

[Liberty]

"Jonas acquired Easit AB (Sweden)

 

"provides case management, data management software and highly skilled consulting services"

 

"Our flagship products have matured with over 20 years of industry experience"

 

82 employees"

 

Also:

 

"Constellation Real Estate Group acquired Top Producer from Move, Inc., a subsidiary of News Corp

 

"a leading provider of real estate software"

 

"include the industry leading CRM"

 

Founded in 1982 and purchased by Move in 2000

"over 27,000 customers and 70 Top Producer employees""

 

Also:

 

"Lumine Group acquired TransMedia Dynamics (U.K.)

 

"a provider of content supply chain software"

 

"customer base spans North America, Europe, and Asia-Pacific (...) upwards of 50,000,000+ tasks automated annually"

 

Founded in 1998

27 employees

Founder-led"

 

h/t @pearnick

[Liberty]

Larger one at Harris:

 

"Harris acquired Bizmatics Inc (U.S.)

 

"The Bizmatics suite of software, PrognoCIS, encompasses electronic health records (EHR), practice management and revenue cycle management (RCM) software and services."

 

"Based in Silicon Valley since 2001"

 

319 employees (LinkedIn)"

 

Also one at Volaris:

 

Volaris acquired CPR Vision (Singapore) from WPP AUNZ

 

"a provider of end-to-end CRM systems in the luxury retail and hospitality verticals."

 

"APAC’s leading CRM, Loyalty & Digital Agency"

 

"Founded in Singapore in 2001"

79 employees

 

Also at Vela in Australia:

 

Vela Asia Pacific acquired Beacon Business Systems (Australia), (the business assets of Pixen Pty Ltd)

 

"a Perth and Melbourne based Australian business focussed on the petroleum retail market which has evolved over 20 years."

 

"over 700 users"

20 employees

 

And one more at Harris:

 

"Harris acquired Realtime Information Technology (U.S.)

 

"education software provider."

 

"Serving 200 organizations throughout New Jersey (...) tracks every aspect of student life, including scheduling, grade reporting, medical, food service, (...)"

 

Founded in 2001

20 employees"

 

Via @pearnick

[Liberty]

New one at Jonas in Australia:

 

"Jonas acquired UniOne Pty Ltd. (Australia)

 

"UniOne is an Australian software company that provides student activity management for universities. The functionality of the platform includes student clubs & sports, managing memberships/club purchases, case management, (...) ""

 

h/t @pearnick

[wisowis]

Anybody aware of a recent interview that Mr Leonard did ?

i heard a comment on Acquirer Podcast about a recent interview, he did, but couldnt find it online

 

I'm pretty sure this was the one that got taken down quickly (I don't know why) - and everyone is after it!  Someone on the board might have a recording of it??  He speaks so rarely I can't imagine there's been another one.

 

I think this is the interview you are referring to?

 

[thowed]

It is.  Amazing - thanks!

[Libs]

The Buffett / Munger reference is telling; they are birds of a feather for sure. I wonder if they've met / talked shop.

 

"I love changing my mind....to have someone take you from an entrenched position and be convinced otherwise through a rational process. it's wonderful."

 

This guy is deeply insightful and self-aware. I worked in the corporate world for years and never had a leader like this.

 

 

[Ice77]

Refreshing interview. The breadth of his early experiences is truly incredible - from being a mason, a bouncer, a municipal clerk - to a banker and a VC - and now heading CSU. What a journey!

[Liberty]

Contour Software, CSI's operation in Pakistan where they do a lot of outsourcing stuff for their other units, has over 210 jobs opening. Seems like it's going well:

 

http://contour-software.com/careers/

 

h/t Adrián Hernández / @adrivalue

 

[Liberty]

Quote

TSS acquired Innofactor Prime from Innofactor (Finland)

"resource management software"

"their main focus is on the vertical of religious organizations in Finland. In this vertical, they are one of the leading companies in Finland."

"part of Innofactor for over 20 years"

"The transaction has a positive net effect of about 2,6 million euros to Innofactor first quarter 2021 EBITDA and estimated about 2 million euros negative effect for 2021 net sales. Innofactor continues to provide managed services for purchased Prime business of TSS."

h/t Pearnick

[Liberty]

Looks like the AGM will be virtual this year too, on May 6th at 8 AM:

 

https://www.globenewswire.com/news-release/2021/03/29/2201158/0/en/Constellation-Software-Inc-Announces-Annual-General-Meeting.html

[Liberty]

Quote

Constellation Software deployed a record $546MM capital on 29 acquisitions in Q1. This is above the $404MM in RBC's model and up from $141MM Q1/FY20. Excluding the $267MM acquisition of Topicus, which closed January 5, $CSU.TO deployed $279MM capital on acquisitions in Q1...

RBC estimates that the businesses acquired Q1, excluding Topicus, generate $322MM annual revenue, which is 6.6% accretive to EPS.  Already Constellaon has closed more mid/large-sized acquisitions in FY21 compared to just two in FY20.

via @latecycle_nick