Being Acquired

Constellation Software, Inc. : Constellation Software, Inc. > About Us > Being Acquired

Acquiring, Building & Managing Exceptional Companies

We buy Good vertical market software companies. Now and again, we buy an Exceptional company.

The Exceptional businesses we buy represent a lifetime of effort and talent, and they share three traits that we believe make them Exceptional:

  • An outstanding manager
  • Consistent profitability
  • Above average growth

Whether they are selling for reasons of health, estate planning or a burgeoning interest elsewhere, vendors share one other trait: The desire to have their businesses continue to operate in accordance with the history and values that made them Exceptional in the first place.

CSI recognizes the value of these rare companies, and following an acquisition, we leave them to continue their Exceptional operations as they have in the past.

Exceptional vertical market software companies are exceedingly rare; Good ones, happily, are more common. The Good companies we acquire are generally the first or second-ranked players in their verticals, and are working to establish a solid track record of growth and earnings.

When we buy a Good company, we identify and address the reasons they have not yet become an Exceptional company. To this end, we offer coaching and resources in a number of areas including establishing values and capital allocation processes, profit-sharing programs, benchmarking against our other businesses, the chance to share best practices with other CSI companies, formal management training and ongoing mentoring.

CSI will not take over the day-to-day management of its businesses. We continue to rely on the managers and employees of our subsidiaries to run their businesses well. Managers who are excited at the prospect of creating an Exceptional company and who are willing to embrace new ideas tend to flourish at CSI.

Our Acquisition Criteria

We use somewhat arbitrary methods to determine whether or not a company is a good fit for CSI; and over the years we’ve honed our eye to the point where we can very quickly establish whether or not a company is of interest. The first thing we do is use history (not forecasts) to determine whether a company is Good or even Exceptional.


Exceptional Businesses:
We are pleased to hear from brokers or principals of Exceptional businesses that meet the following criteria:

  • A mid- to large-sized vertical market software company (a minimum of $1-million earnings before interest and tax)
  • Consistent earnings and growth — generally EBITDA/revenue + revenue growth of 20 percent or more per year
  • Experienced and committed management
  • An offering price that has been determined

Good Businesses:
We are pleased to hear from principals or representatives of Good Businesses, providing they meet all of the following criteria:

  • Number 1 or Number 2 market-share holder in a niche vertical market
  • Revenues of at least $5-million
  • Hundreds or thousands (not dozens) of customers
  • Unimposing competitors
  • An offering price that has been determined

Our Philosophy

  • We promise the strictest confidence and will generally respond to enquiries within one business day
  • We will not engage in unfriendly takeovers
  • Although we prefer 100 percent ownership in our companies, we will buy less if the vendors wish to continue to participate in the success of their business


Please Contact:


Mark Leonard
Constellation Software Inc.
20 Adelaide Street East, Suite 1200
Toronto, ON, Canada M5C 2T6

Tel: (416) 861-2279
Fax: (416) 861-2287
mleonard@csisoftware.com