Author Topic: CSU - Constellation Software  (Read 309763 times)

Liberty

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Re: CSU - Constellation Software
« Reply #720 on: February 13, 2020, 07:03:46 AM »
Harris acquisition:

https://www.harriscomputer.com/en/news/?date=1581310800&article=harris-healthcare-group-acquires-doc-tor-com

Quote
N. Harris Computer Corporation’s (“Harris”) healthcare group announced today that it has completed the acquisition of Doc-Tor.Com L.L.C. (“Doc-Tor.com”) of Allendale, NJ. Doc-Tor.com provides an easy-to-use, cloud-based practice management system for physician offices, allowing for efficient and seamless workflow, from scheduling through collections and analytics.

The Doc-Tor.com transaction also included the acquisition by Harris of New Ultimate Billing LLC (“Ultimate Billing”), a full-service revenue cycle management (RCM) provider with 20 years of combined administrative leadership and medical billing experience.

Pearnick writes: "19 employees (16+3)"

https://twitter.com/pearnick/status/1227793664325365761?s=20

h/t @pearnick


gary17

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Liberty

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Re: CSU - Constellation Software
« Reply #722 on: February 14, 2020, 06:49:50 AM »
Finally getting around to looking at CSU Q4. Looks decent to me. A little weak on organic growth, but always hard to know if it's weak or if they just bought more distressed assets lately...  Big swings in licenses and hardware, which can be lumpy.

IFRS 16 accounting makes things less clear for FCFA2S ("using the modified retrospective approach and accordingly the information presented for 2018 has not been restated"), but if you take it into account, looks good.

FY19 acquisitions: "$549 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $139 million resulting in total consideration of $688 million". And that's with no big acquisitions that year.

Public sector revenue increased 18% in Q4, 15% for FY19.

Private sector revenue increase 9% in Q4, 12% for FY19.

ROIC looking good:



Looks like they did over 90 acquisitions this year, versus about 55 last year. In 2014 they did in the 20s acquisitions during the year, so it's been quite a change in the capital deployment capability. And the ROIC doesn't seem (yet?) to have suffered.

"The Average Invested Capital for 2019 was $2,260 million"
« Last Edit: February 14, 2020, 07:26:34 AM by Liberty »

wisowis

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Re: CSU - Constellation Software
« Reply #723 on: February 19, 2020, 05:02:08 PM »
Hey, thanks for sharing your thoughts. I'll share some of mine.
....


Thanks Liberty (and others), I appreciate the responses a lot.

You say that Mark Leonard is financially conservative, which I agree with. He knows how to value companies, having built a career on it. And he has told us what he thinks that CSU is worth, and given how much I respect his ability to value companies, I have trouble ignoring it. Thanks for pointing out interest rates, which I forgot (as always) to take into account. For a guy so scared of taking advantage of shareholders that he won't even buyback shares of his company (last line of my last response!), I don't think that his warning bells on valuation are mere posturing. I think he is truly fearful that his shareholders will suffer poor returns, even if he and his team deliver admirable business performance.

For what it's worth, I am bringing up the issue of valuation because I am long this company, bought at a much lower valuation that where it trades today. Somewhere in his letters Mark laments the year that his last critic capitulated. And with the sentiment around the company being so positive, I think some unsophisticated investors have joined the shareholder ranks, as he warns (as an unsophisticated investor myself, I can easily recognize my peers!).

Thanks again, I do appreciate the time you've taken to share your thoughts, cheers.

snowball82

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Re: CSU - Constellation Software
« Reply #724 on: February 19, 2020, 05:30:41 PM »

Liberty

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Re: CSU - Constellation Software
« Reply #725 on: February 23, 2020, 06:13:26 PM »
ACCEO acquisition:

https://acceo.com/en/news/acceo-solutions-inc-a-wholly-owned-subsidiary-of-n-harris-computer-corporation-acquires-solution-icc-technologies/

Quote
ACCEO Solutions Inc. (“ACCEO”), a wholly-owned subsidiary of N. Harris Computer Corporation (“Harris”), announces that it has acquired Informatique Côté Coulombe Inc. (“ICC Technologies”), a developer of high-end enterprise resource planning software offerings for the construction, distribution, retail, and printing sectors.

By joining the ACCEO family, ICC Technologies’ customers will be added to a base of more than 40,000 ACCEO customers, and more than 60,000 North American Harris customers.

This acquisition allows ACCEO to consolidate its position as a leader in management solutions in Quebec and Canada. The addition of ICC Technologies’ solutions to ACCEO’s portfolio expands the range of solutions offered and strengthens its position, particularly for the hardware and building materials industry.

Pearnick: "110+ employees, 800+ clients"

https://twitter.com/pearnick/status/1228707610574163971?s=20

gary17

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Re: CSU - Constellation Software
« Reply #726 on: February 23, 2020, 07:15:04 PM »
given how expensive e this stock is now.  would people sell this given the coronavirus market sell off and buy later
or just hold and buy some more

i have gotten lucky to have held a few winners. but that’s a problem cuz. now i don’t know what to do lol!

Liberty

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Re: CSU - Constellation Software
« Reply #727 on: February 24, 2020, 11:08:00 AM »
Jonas acquisition:

https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Acquires_QuickQube

Quote
Jonas Software (“Jonas”) is pleased to announce the acquisition of the intellectual property of QuickQube from Solutions On The Go, LLC..

“We are very excited to continue to invest in the moving and storage industry as this is our third acquisition in the past few years,” explains Peyton Moore, President at EWS Group “Solutions On The Go has been a market leader and successful software company in the moving and storage industry. We are pleased to be able to acquire the QuickQube product, which will complement our existing offerings and drive even greater value to our collective office and industrial moving clients. We are pleased to welcome them to the Jonas family.”

h/t @pearnick

sane

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Re: CSU - Constellation Software
« Reply #728 on: February 26, 2020, 08:08:07 AM »
2019 acquisitions were at 2.1x P/S compared to 3.0x in 2018.  Seems odd, no?

Source: p.52-54 Shareholder report

4. Business acquisitions
(a) During the year ended December 31, 2019, the Company completed a number of acquisitions for aggregate cash consideration of $549 plus cash holdbacks of $102 and contingent consideration with an estimated fair value of $37 resulting in total consideration of $688.

b) The 2019 business acquisitions contributed revenue and net income of $267 and $3 during the year ended December 31, 2019. If these acquisitions had occurred on January 1, 2019, the Company estimates that consolidated revenue would have been $3,816 and consolidated net income for the year ended December 31, 2019 would have been $314 as compared to the amounts reported in the statement of income for the same period. In determining these amounts, the Company has assumed that the fair values of the net assets acquired that were estimated and accounted for on the dates of acquisition would have been the same as if the acquisitions had occurred on January 1, 2019. The net income from acquisitions includes the associated amortization of acquired intangible assets recognized as if the acquisitions had occurred on January 1, 2019.

Liberty

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Re: CSU - Constellation Software
« Reply #729 on: February 26, 2020, 09:12:09 AM »
2019 acquisitions were at 2.1x P/S compared to 3.0x in 2018.  Seems odd, no?

Source: p.52-54 Shareholder report

4. Business acquisitions
(a) During the year ended December 31, 2019, the Company completed a number of acquisitions for aggregate cash consideration of $549 plus cash holdbacks of $102 and contingent consideration with an estimated fair value of $37 resulting in total consideration of $688.

b) The 2019 business acquisitions contributed revenue and net income of $267 and $3 during the year ended December 31, 2019. If these acquisitions had occurred on January 1, 2019, the Company estimates that consolidated revenue would have been $3,816 and consolidated net income for the year ended December 31, 2019 would have been $314 as compared to the amounts reported in the statement of income for the same period. In determining these amounts, the Company has assumed that the fair values of the net assets acquired that were estimated and accounted for on the dates of acquisition would have been the same as if the acquisitions had occurred on January 1, 2019. The net income from acquisitions includes the associated amortization of acquired intangible assets recognized as if the acquisitions had occurred on January 1, 2019.

Seems to me like that's in good part a factor of size. In 2018 they had Acceo, which was probably at a higher multiple (but they used some leverage on it). 2019 they had no large transactions, so more small ones that tend to be at lower multiples.