Author Topic: CSU - Constellation Software  (Read 236646 times)

sane

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Re: CSU - Constellation Software
« Reply #630 on: July 18, 2019, 04:20:08 AM »
If the MDS Global acquisition cost at least $50 million that makes valuation at least 11x free cash flow ($4.5 million, adj. EBITDA $4.8 million) and 1.7x sales ($29 million: all FYE Dec 2018).  Course it could be much higher. 

16.3% adj. EBITDA margins, 89% of sales in UK with rest also to Europe. 

Seller was 66 year old founder, with non-owner exec team in place.

"Gary Bunney, who remains the CEO of MDS Global, said, “We are very excited by this acquisition. As part of the Volaris family of companies, we can further invest in, and grow, our business. We are now part of a larger network of like-minded organizations dedicated to delivering world-class solutions in very specific and focused industries. This will allow us to scale more rapidly beyond our historical base in the UK and Europe to address the needs of new disruptive MVNOs, IoT providers, and next-generation B2B operators across the globe.”  https://www.mdsglobal.com/2019/07/18/volaris-acquires-mds-global-adding-a-market-leading-cloud-based-bss-platform-to-their-communications-and-media-portfolio/


Liberty

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Re: CSU - Constellation Software
« Reply #631 on: July 18, 2019, 05:40:08 AM »
If the MDS Global acquisition cost at least $50 million that makes valuation at least 11x free cash flow ($4.5 million, adj. EBITDA $4.8 million) and 1.7x sales ($29 million: all FYE Dec 2018).  Course it could be much higher. 

16.3% adj. EBITDA margins, 89% of sales in UK with rest also to Europe. 

Seller was 66 year old founder, with non-owner exec team in place.

"Gary Bunney, who remains the CEO of MDS Global, said, “We are very excited by this acquisition. As part of the Volaris family of companies, we can further invest in, and grow, our business. We are now part of a larger network of like-minded organizations dedicated to delivering world-class solutions in very specific and focused industries. This will allow us to scale more rapidly beyond our historical base in the UK and Europe to address the needs of new disruptive MVNOs, IoT providers, and next-generation B2B operators across the globe.”  https://www.mdsglobal.com/2019/07/18/volaris-acquires-mds-global-adding-a-market-leading-cloud-based-bss-platform-to-their-communications-and-media-portfolio/

A little more details:

https://twitter.com/adrivalue/status/1151736465669464064

https://twitter.com/pearnick/status/1151815420913098753

https://twitter.com/adrivalue/status/1151743032674439168

"MDS signed three new customers outside the UK in late 2018, including one £8M contract (there aren't a lot of telecos out there...). They also extended contracts with their biggest customers for the next 3-5 years, one of them = £8.8M"



Looks to me like they're paying for some of that forward revenue.

And if they expect that they can eventually bring margins to company average, the multiple is further reduced by a significant amount.

Chances are that the effective multiple is within their traditional range.
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sane

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Re: CSU - Constellation Software
« Reply #632 on: July 18, 2019, 06:55:58 AM »
Quote
Looks to me like they're paying for some of that forward revenue.

And if they expect that they can eventually bring margins to company average, the multiple is further reduced by a significant amount.

Chances are that the effective multiple is within their traditional range.

Agreed.  Thanks for the links.

Liberty

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Re: CSU - Constellation Software
« Reply #633 on: July 19, 2019, 04:23:12 PM »
Another press release at the CSI level, which should denote $50m+:

https://www.csisoftware.com/docs/default-source/press-releases/tss-signing---acquisition---july-2019.pdf

H/t @pearnick
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Liberty

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Re: CSU - Constellation Software
« Reply #634 on: July 23, 2019, 11:28:22 AM »
Acquisition at Harris:

https://www.harriscomputer.com/en/news/?date=1563854400&article=harris-rsquo-local-government-division-acquires-ims-enterprises-inc-

Quote
IMS Enterprises Inc., a division of Harris Local Government, is a full-service credit and debit payment processor that specializes in providing payment processing software solutions to government and public sector organizations.

h/t @pearnick
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Liberty

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Re: CSU - Constellation Software
« Reply #635 on: July 24, 2019, 11:50:38 AM »
Volaris published something on their acquisitions so far this year:

https://explore.volarisgroup.com/acquisitions/h1-2019-acquisition-update

Quote
In the first half of 2019 Volaris Group acquired over a dozen businesses in diverse verticals and geographies. New to Volaris Group are 2 vertical market software companies in Latin America, 2 in Australia, 5 in Europe, and 5 in North America. Volaris strengthened its presence in its core markets and entered the Healthcare, Social Welfare and Banking verticals.
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Re: CSU - Constellation Software
« Reply #636 on: July 25, 2019, 03:17:10 AM »
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Liberty

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Re: CSU - Constellation Software
« Reply #637 on: August 01, 2019, 12:47:02 PM »
New acquisition at Volaris, this one in Australia:

https://www.volarisgroup.com/news/article/volaris-group-welcomes-valuepro-to-property-valuation-vertical

Quote
Volaris today announced that it has acquired ValuePRO Software Pty Ltd. (ValuePRO) based in Brisbane, Australia. ValuePRO is a leader in enterprise-grade software platforms for Property Valuers and represents Volaris’ first company in the Property Valuation vertical.

ValuePRO offers property valuation professionals around the world a proven, easy to use and feature-rich platform for running their business. “ValuePRO has built a reputation for reliability, great customer service and market-leading innovation over the past 15 years”, said Piers Macrae Cockram, Founder & CEO of ValuePRO. “Now as part of Volaris, we can invest even further and faster in strengthening our product and growing our platform for the mutual benefit of all of our customers, partners and hardworking team.”

h/t @pearnick
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Liberty

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Re: CSU - Constellation Software
« Reply #638 on: August 02, 2019, 05:59:14 AM »
TSS buys one in France:

https://www.globenewswire.com/news-release/2019/08/01/1895625/0/en/Total-Specific-Solutions-a-Constellation-Software-Company-Completes-Acquisition-of-Salvia-Développement-SAS.html

"a French provider and integrator of software solutions for private companies, real estate- and local public entities."
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Liberty

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Re: CSU - Constellation Software
« Reply #639 on: August 02, 2019, 04:12:29 PM »
CSU Q2:

https://www.csisoftware.com/docs/default-source/press-releases/csi---press-release-q2-2019---final.pdf

Quote
A number of acquisitions were completed for aggregate cash consideration of $82 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $28 million resulting in total consideration of $110 million.

Subsequent to June 30, 2019, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of $190 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $30 million resulting in total consideration of $221 million.

Ex-FX, CSU's organic growth for licenses and maintenance were 8% and 4% respectively in Q2. It's professional services and hardware (lower ROIC, less valuable businesses that they sometimes cut on purpose after acquisitions) that dragged things down. Looks solid to me.

https://twitter.com/LibertyRPF/status/1157430399888502786

Private sector organic growth of licenses ex-FX was 20% in Q2. That's after being 11% and 18% the previous two Qs sequentially. Some big sales going on there...
« Last Edit: August 02, 2019, 04:21:14 PM by Liberty »
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