{"id":168647,"date":"2025-09-25T15:44:10","date_gmt":"2025-09-25T15:44:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/168647\/"},"modified":"2025-09-25T15:44:10","modified_gmt":"2025-09-25T15:44:10","slug":"constellation-software-founder-mark-leonard-resigns-shares-extend-recent-plunge-after-investor-pressure","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/168647\/","title":{"rendered":"Constellation Software founder Mark Leonard resigns, shares extend recent plunge after investor pressure"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Constellation Software founder Mark Leonard, left, with Lisa Melchior, managing partner and founder of Vertu Capital, at the 2022 Canadian Venture Capital and Private Equity Association\u2019s annual conference in Ottawa.Sean Silcoff\/The Globe and Mail<\/p>\n

Mark Leonard, the founder and president of Canadian tech giant Constellation Software Inc. CSU-T<\/a>, is resigning, effectively immediately. The company cited unspecified health reasons.<\/p>\n

Mark Miller, the company\u2019s chief operating officer, is taking over as president. Mr. Leonard will remain a board director.<\/p>\n

Constellation\u2019s shares plummeted as soon as the Toronto Stock Exchange opened, but recovered some losses quickly and after 45 minutes were trading down around eight per cent.<\/p>\n

Mr. Leonard built Constellation into a technology juggernaut by being a serial acquirer of niche software companies. Lately, however, the company has faced questions about its continued success in the age of artificial intelligence.<\/p>\n

Mr. Leonard has long avoided public forums, but on Monday the company hosted a question-and-answer session<\/a> about AI, at the request of a large shareholder. During the call, Mr. Leonard did not provide much clarity, and at times, was dismissive of the disruption.<\/p>\n

Constellation\u2019s rise has been a major tech sector success for the TSX, but its shares have struggled this year and are now down around 15 per cent, while the broader market is up 20 per cent.<\/p>\n

Mr. Leonard founded Constellation in 1995 after working in venture capital for roughly a decade. Using $25-million in seed capital from OMERS and former associates at Ventures West Capital, he created a serial acquirer of small software companies that is now a conglomerate.<\/p>\n

The strategy he deployed, often referred to as a \u2018roll-up\u2019 of small companies, can be controversial because some executives who use it continually deploy earnings toward more deals, and often overpay. That becomes problematic during a downturn, because investors start caring less about growth and more about profit. <\/p>\n

Constellation, though, has been known for its cost discipline. During the COVID-19 pandemic for instance, tech companies were often paying 15 times current revenues for acquisitions. Constellation didn\u2019t disclose acquisition multiples, but Veritas Investment Research estimated Constellation paid an average of only 0.8 times its targets\u2019 annual sales.<\/p>\n

For years, investors loved Constellation\u2019s disciplined growth. But lately there have been fears that its core business model will be disrupted by AI.<\/p>\n

Generative AI tools have become much more adept at writing and testing software code, and can even create functioning prototypes. That represents a potentially huge opportunity for Constellation, allowing it to develop software faster and at a lower cost. But it also means rivals can do the same. Constellation\u2019s own customers could use these tools to develop software, too.<\/p>\n

\u201cAI makes it potentially way more exciting for us to provide customization, but it also makes it much more likely that the client will do it themselves,\u201d Mr. Leonard said on the call Monday.<\/p>\n

Mr. Miller, the new president, has worked at Constellation for 24 years. Before joining, he co-founded Trapeze Group, which became the first company that Constellation Software acquired.<\/p>\n

With reports from Joe Castaldo and Sean Silcoff<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Constellation Software founder Mark Leonard, left, with Lisa Melchior, managing partner and founder…\n","protected":false},"author":2,"featured_media":168648,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-168647","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/168647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=168647"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/168647\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/168648"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=168647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=168647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=168647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}