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2020 has been a year of rapid change. Structural and societal changes in response to the COVID-19 pandemic continue to unfold, while sectors globally experience varying levels of both turbulence and triumph. Constellation Software Inc. continues to invest in vertical market software and drive growth through ongoing acquisitions.
Despite the headwinds from the pandemic, Constellation announced growth in total revenue to $922 million in its Q2 earnings report this month – an increase of 9% over Q2 2019. Acquisitions played a key role in growth, as organic growth was negative 7% in the quarter. Like many businesses, Constellation saw some industry segments negatively impacted in the form of existing customer cancellations and delayed or cancelled purchase decisions from new customers.
Constellation continued to acquire new businesses in the midst of the pandemic, with $84M of acquisitions completed in the quarter and another $78M completed or committed to in July and early August. Cash flows from operations were just under $600 million in the first half of the year and the company ended the quarter with $585M in cash on the balance sheet, providing a strong base from which to consider additional acquisitions over the second half of the year.
Excluded from these figures was the announcement of a binding agreement to acquire a large Netherlands-based vertical market software provider by its TSS operating group. Constellation used a unique structure of equity, debt and a planned future public listing of the combined entity to acquire this high-quality asset. More information can be found at the link below.
The Constellation Real Estate Group contributed to the figures described above, acquiring the industry pioneer Virtual Properties in early April. We have quickly adopted an agile approach to remote due diligence and execution that allowed us to complete this transaction as well as integrate acquisitions completed earlier in the year.
To read Constellation’s full Second Quarter Earnings Report, click here.
Notable Q2 Acquisitions:
- Tune Acquired into Perseus Operating Group of Constellation Software
- Constellation Real Estate Group’s Constellation1 Acquires Real Estate Tech Pioneer Virtual Properties
- Constellation Software Inc. Reaches Agreement to Combine its TSS Operating Group with Topicus.com to Form a New Operating Group
In the news:
- Constellation Software Inc. Announces Changes to its Management Team
- Enspire for Enterprise Launches Brand, Reveals New Visual Identity
As we look toward the second half of the year, we continue to see opportunities to invest, long-term.
As always, we invite you to connect. If you’d like to discuss any of the above or learn more about Constellation Software, please don’t hesitate to reach out.
Daniel Eisen
Vice President, Mergers & Acquisitions
Constellation Real Estate Group
P: 425-882-0760