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Being Acquired.

ConstellationSoftware, 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

While we are open to discussing any opportunity, our preferred
businesses are categorized below.

Exceptional Businesses

We are pleased to hear from principals or representatives 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 that meet 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 % ownership in our companies, we will buy
    less if vendors wish to continue to participate in the success of
    their business, particularly if their business is Exceptional and
    /or large

Experiences

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Address

Constellation Software Inc.

#1200 - 20 Adelaide Street East Toronto, ON M5C 2T6 CANADA

info@csisoftware.com

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