In this company episode on Constellation Software, Speedwell Research draws on their extensive research report to cover everything from Mark Leonard's early insight into the quality of Vertical Market Software Businesses to their unique operating structure. Investors can learn not only about the software business, but also about how Constellation Software has created a conglomerate of hundreds of companies through an impressive multi-decade acquistion spree, all while keeping capital allocation discipline.  We hope you enjoy!   

Company Description: A decentralized and acquisitive conglomerate of Vertical Market Software Companies based out of Canada.

Purchase the full Constellation Software Report here. 

Purchase a Speedwell Membership to gain access to all Reports here. 

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Show Notes

Section 1: History and Background

(0:00) Intro

(0:58) Constellation Software High-Level Business Description

(5:01) Mark Leonard History and Constellation Software Background 

(10:31) Constellation Software IPO 

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Section 2: Vertical Market Software

(13:25) What is VMS and Competitive Advantages 

(20:37) Financial Model Benefits

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Section 3: Corporate Structure and Revenue Segments 

(23:32) Six Groups 

(33:54) Revenue Segments and Context

(38:41) How SaaS Changes Things 

(44:29) Constellation Software Competitive Advantages

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Section 4: Topicus and Lumine

(52:05) Topicus

(1:06:46) Lumine

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Section 5: Capital Allocation, Valuation & Risks.

(1:08:37) Capital Deployment and Hurdle Rates 

(1:17:29) ROIC

(1:20:00) Risks 

(1:23:06) Bull/ Bear Case

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Purchase the full Constellation Software Report here. 

Purchase a Speedwell Membership to gain access to all Reports here.  

 

Articles Mentioned

Speedwell’s Memo: From Private to Public Markets: The Detrimental Impact of Investors’ Expectations

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Threads: @speedwell_research

Email us at [email protected] for any questions, comments, or feedback

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Disclaimer

Nothing in this podcast is investment advice nor should be construed as such. At the time of publishing, one or more contributors to the podcast had a position in Constellation Software. Furthermore, accounts one or more contributors advise on may also have a position in Constellation Software. This may change without notice. Please see our full disclaimers here:  https://speedwellresearch.com/disclaimer/