VMS Vortex Metals Inc

Constellation Software Inc. ("Constellation" or "CSI") (TSX:CSU) announced today
that it has released a letter to shareholders from President Mark Leonard for
the purpose of providing shareholders additional information with respect to the
proposed acquisition of Total Specific Solutions (TSS) B.V. announced earlier
today.


Constellation Software Inc. 

TO OUR SHAREHOLDERS  

I, along with a number of the members of the company's Board of Directors are
concerned that the acquisition of Total Specific Solutions (TSS) B.V. ("TSS")
may generate some confusion amongst our shareholders. It is much larger
(approximately a EUR240 million purchase price) than our normal acquisitions,
and that price is a higher multiple of Net Maintenance Revenue (2.65 times) than
we usually pay. Through this acquisition, we are acquiring a collection of
businesses that is similar to CSI, and that will initially be financed with debt
at a time when debt is very inexpensive. At first blush, it should, as the
equity analysts like to say, be accretive. Nevertheless, there are
characteristics of both the investment and the planned financing that aren't
immediately obvious. 


While TSS is composed primarily of businesses similar to those that we own in
North America, there are some significant differences. Most obviously, they are
not in North America. Constellation has not covered itself with glory outside of
North America. In some instances we have acquired well, but with the exception
of one outlier, our average returns on invested capital outside of North America
have been lower than inside North America. Despite the cultural differences and
higher social costs, our sense is that there are no fundamental reasons for
permanently inferior returns when we operate abroad. We have yet to prove that
to ourselves. 


Within the TSS group there are some businesses that don't build their own
vertical market software ("VMS"). I've noted in many markets with limited
numbers of customers, that VMS businesses tend to have a higher proportion of
professional services revenues, and a greater dependence upon third party
software platforms. Some of the TSS businesses certainly fall into this
category. Others TSS subsidiaries have no VMS component at all.  Over the long
haul, both of these business types are likely to generate lower operating
margins than their pure VMS siblings. Canadian securities laws require that we
file a Business Acquisition Report ("BAR") within 75 days of completing a
significant acquisition. Our TSS BAR will outline in further detail the
historical results of the company and its constituent businesses and, once
filed, will be available at www.sedar.com. 


We expect that TSS will be our first acquisition that is financed on a
stand-alone basis. As I explained in the last President's Letter to
Shareholders, a number of private equity firms have successfully built
portfolios of large VMS businesses using highly leveraged capital structures.
They have effectively priced us out of the market for most large VMS
transactions. We are planning to adopt some of their financing tactics with the
TSS acquisition. We are in discussions with a number of Dutch and European
financial institutions about providing stand-alone debt financing for TSS to
replace the temporary financing that we've arranged through our existing
syndicate of lenders in Canada. We are also in discussions with potential equity
partners about taking a significant minority stake in the TSS investment. We
believe that this combination of financing techniques has the potential to allow
us to generate an after tax cash on cash return on CSI's ultimate investment in
TSS that is comparable to that which we generate on our other investments. 


Institutionally, CSI stands to learn a lot about doing business abroad, and
about the impact on a business of financial leverage. At least for a while, we
will present the TSS financial results separately within the CSI quarterly
financial statements so that our shareholders can form their own opinions
regarding our continued participation in larger, financially-leveraged
acquisitions.


Mark Leonard, President

December 16th, 2013 

Constellation Software Inc.

Forward-Looking Statements

Certain statements herein may be "forward looking" statements that involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Constellation or the industry to be
materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Forward looking
statements involve significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not necessarily be
accurate indications of whether or not such results will be achieved. A number
of factors could cause actual results to vary significantly from the results
discussed in the forward looking statements. These forward looking statements
reflect current assumptions and expectations regarding future events and
operating performance and are made as of the date hereof and Constellation
assumes no obligation, except as required by law, to update any forward looking
statements to reflect new events or circumstances.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Constellation Software Inc.
Jamal Baksh
Chief Financial Officer
(416) 861-2279
jbaksh@csisoftware.com
www.csisoftware.com

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