TLDR:
- Constellation Software Inc. is looking to buy Canadian venture capital-backed companies that are struggling to raise funds
- Constellation’s acquisition strategy is focused on companies with annual revenue of US$20 million or more, and having raised at least US$50 million in venture capital.
Article Summary:
Constellation Software Inc., one of Canada’s most valuable companies, is embarking on a new venture to acquire Canadian venture capital-backed businesses that are facing challenges. They are specifically targeting companies with annual revenue of US$20 million or more, and have raised at least US$50 million in venture capital. Constellation’s acquisition strategy focuses on software providers that serve niche subsectors, with six subsidiaries working on buying companies with certain characteristics such as modest growth, recurring revenues, and solid cash flows.
The company has a strong track record and has been praised for its capital allocation approach. Referring to the president of Constellation, Mark Leonard, he is compared to Warren Buffet due to his successful strategies. Despite concerns from investors about the company’s ability to maintain growth, Constellation remains optimistic about its future acquisitions.
Constellation’s recent shift towards large acquisitions and exploring new sectors reflects the company’s willingness to adapt and grow. Through initiatives like VMS Ventures and Venstra Ventures, Constellation is also supporting startups and fostering organic growth within the organization. The company’s positive revenue growth and acquisition strategies make it a key player in the Canadian tech industry.
