“Software Jesus” Mark Leonard is diving into the impact of AI on an investor call this morning at 9AM. In January I covered the DeepSeek situation, picking Constellation as a potential winner - but it hasn’t been smooth sailing for the serial acquirer this year…
… given they haven’t been as active on M&A as they’d like to be…
… a theme that’s likely to be magnified by AI, as private equity raises capital to future-proof legacy software - pushing up the price for a finite set of targets.
Very difficult for us to compete with private equity for some of the large ones. And just generally, it’s just a difficult market out there. For us, some of the prices have really gone up dramatically.
On the positive side, CSU’s hyper-niche VMS approach entrenches it deeply in customer workflows - turning the competitive threat of AI into an opportunity to streamline operations.
With the stock testing it’s long-term average valuation, the event could offer clues about where Canada’s favourite software conglomerate trades next… let’s see.
