Dive into the pages of The Economist's insightful coverage as we unveil the remarkable journey of Constellation Software. Get the full story to gain a comprehensive understanding of our strategic approach in the dynamic software landscape of mergers and acquisitions.
Constellation Software, in this article likened to the legendary Berkshire Hathaway in the tech world, has perfected the art of acquiring tech firms. With a keen eye for companies showing consistent revenue and profit growth, Constellation has made over 860 acquisitions since 2005, with astounding success.
Whether by fluke or design, Constellation’s dealmaking success is based on principles that look strikingly similar to those of the world’s heavyweight acquirer, Berkshire Hathaway.
Constellation’s success reveals an important truth about mergers and acquisitions that would also be familiar to Mr. Buffett: serial acquirers tend to outdo occasional dealmakers.
A few firms like Tyler Technologies from Texas and Roper Technologies from Florida are trying to emulate Constellation’s workout regime of picking up niche software makers. None has so far come close to matching the Canadian company’s muscle.
Constellation believes that splitting a business weakens its bond with customers... Cash from the subsidiaries flows to the parent company, which uses it to buy new businesses. These in turn generate more cash, and so on.
In a landscape where IPOs struggle and venture capital wanes, Constellation Software shines as a beacon of success. Learn how this Canadian firm has become the pinnacle of tech acquisition, rivaling giants like Berkshire Hathaway.
Unlike traditional methods, Constellation employs a hands-off approach post-acquisition, allowing acquired companies to maintain autonomy. Explore how this strategy fosters growth and sustains customer relationships, driving continuous success.
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