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Constellation Software's Perseus group acquires Catalyst Computer Systems

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The Perseus operating group of Constellation Software Inc (TXS: CSU), based in Toronto, Canada, has acquired Catalyst Computer Systems, a leading UK business management software supplier to specialised trades and dealers. M&A advisor BCMS advised the shareholders of Catalyst throughout the transaction, which completed in September 2020.

Established in 1989, and headquartered in Mountsorrel, Loughborough, Catalyst Computer Systems is the developer and vendor of an integrated software solution, providing everything from electronic point of sale, through vehicle and unit sales to workshop administration, specialist order processing, payroll, planning and invoicing systems. This highly versatile product is one of the leading dealer management systems in many industries, including Motorcycle, Caravan & Motorhome, Car, Logistics & Road Haulage, Agricultural Machinery, Retail Sales and Trade Counter & Order Distribution. 

Perseus is an operating group of Constellation Software, which is listed on the Toronto Stock Exchange. Perseus acquires, manages, and builds software businesses which provide specialised, mission-critical software solutions. 

The acquisition of Catalyst further expands Perseus's presence in the UK's dealership software markets, having already established a strong presence via its 2012 acquisition of Ibcos – a leading business software supplier to agricultural, groundscare and construction dealers. Overall, Catalyst marks Perseus's ninth acquisition in the dealership software market. 

"We are delighted to have Catalyst's employees and customers join the Perseus family," said Daniel Zinman, the Vice President of the Perseus Group. "Catalyst's addition to our portfolio will expand our insight into the industries we already serve in the UK, which will help us pioneer new technologies in ways we haven't thought of."

Deal commentary

The acquisition will also allow two of the three founding directors of Catalyst – Charles Allison and Les Ward – to retire, while Catalyst's Sales & Marketing Director, Jeff Kingsbury-Smith, will remain in charge as the Managing Director.

"We've always aimed to be a one-stop shopping service for caravan and motorcycle dealers," said Jeff Kingsbury-Smith, "and I'm happy to say that following the acquisition by Perseus, this will not change. We are still totally committed to putting our customers and our industries first. Their success is what got us here, and it will remain our priority."

Commenting on the transaction, Catalyst founding director and company secretary Charles Allison said: "It's undeniably a strange feeling to sell a business you are so connected to personally. But after 31 years, it was the right time for me – and the company – to move on. It's been a blast, and I'm incredibly proud of the business we've built, and the customers we've successfully served through the years. 

"When you decide to sell a business, your relationship and personal 'fit' with your M&A advisor is crucial. Our entire BCMS team were extremely helpful and patient with us throughout the sale process. As our lead advisor, Jim Whitaker, who took over negotiations during the Covid-19 pandemic, was a superstar, offering essential advice and support. I would recommend BCMS' services to businesses exploring their succession and exit options."

BCMS Assistant Director Jim Whitaker added: "As a pioneering software business, Catalyst displays many of the characteristics major tech acquirers look for in a target acquisition. Catalyst is a key player in a specialist discipline, enjoying strong recurring revenues via multiple licence agreements. Its Platinum software is a multifunctional, market-leading and best-of-breed platform – and a business-critical product for a committed, cross-sector client base. 

"BCMS' comprehensive competitive process ensured that we spoke to a range of potential acquirers before entering into final negotiations with the Perseus operating group of Constellation. It's a testament to Charles, Jeff, Les and the entire Catalyst team that the company's new home is with a stockmarket-listed multinational business, with a strong track record of growth. Under new ownership, I'm sure the company will move on to the next level, and I wish everyone at Catalyst, Perseus and Constellation every success moving forward."

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Posted Sep 2020
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