Constellation Software Inc. CSU.TO

The business

Constellation buys small vertical market software companies, the kind that run a dental lab in Ohio or a municipal utility in Norway, and holds them forever. About 69,000 employees sit inside more than a thousand of these businesses, organized into six operating groups that each run their own M&A. The software is mission critical, sticky, and priced below the pain of switching, which is why maintenance and recurring revenue compound quietly at mid-single digits organically while acquisitions do the rest. The moat is the decentralized capital allocation machine itself: a trained bench of operator-acquirers who have done thousands of small deals and know what a $5M ARR practice-management business is worth to the seller and to them.