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Company. Constellation Software: The Business of Buying Software Businesses

The Synopsis

NOTE

Criticism of Constellation Software Acquisition Strategy

One criticism of Constellation Software's acquisition strategy is the purchase of declining businesses with increasing prices, leading to customer churn and a focus on maximizing short-term cashflow rather than long-term growth. Despite some new customer acquisitions and product additions, growth primarily stems from price hikes rather than organic expansion. The limited growth in the small, slow-growing markets of their software verticals exacerbates the situation, with professional service revenue primarily driven by product customization for existing customers.

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