Constellation Software shares close week down 17 percent after founder and CEO steps down

Constellation Software’s founder and chief executive Mark Leonard stepped down from his position after 30 years at the company this week, citing health reasons. The software giant’s stock price hasn’t recovered.

Leonard, who founded the company 30 years ago, will remain on the board. Mark Miller, who joined the company in 2001, was appointed as president in his stead. Miller previously led Volaris Group, an acquisition-focused division of Constellation.

Constellation is a global provider of software across a number of industries. The company acquires, manages, and builds other software businesses as well.

In a statement, Leonard said he and the board had “full confidence” in Miller’s ability to deliver on Constellation’s business plan.

“I can think of no one more experienced, knowledgeable and capable to lead the company at this time,” Leonard said.

“On behalf of the Board and all of the employees of Constellation, I’d like to wish Mark a full and swift recovery,” John Billowits, board chair of Constellation, said in the statement. “His visionary leadership, humility and wisdom have inspired countless Constellation leaders and employees to build what has become a truly exceptional global software company.”

The news came days after Leonard hosted a conference call with Constellation investors about the impact of artificial intelligence (AI) on the software industry. During the call, Leonard warned investors that it was difficult to predict the future of the technology, and assured them that Constellation was using AI and tracking developments closely, according to The Globe and Mail.

Constellation’s stock price dipped by roughly five percent following the call. After the company announced Leonard’s abrupt resignation Thursday, the stock dropped by 10 percent. At market close today, it was at its lowest point of the year, trading at $3,660 on the Toronto Stock Exchange.

Leonard founded Constellation in 1995 after working in the venture capital industry for more than a decade, to assemble a portfolio of software companies that dominated in their respective verticals. He has drawn comparisons to Warren Buffett for his role in building Constellation into a tech juggernaut.

The company is one of Canada’s largest public tech firms, with a roughly $82-billion market cap. Its latest earnings saw the company’s revenue grow 15 percent year over year to reach $2.84 billion. It has more than 125,000 customers across more than 100 countries.

Constellation launched a $200-million venture fund in 2021—VMS Ventures—to find potential acquisition targets. Senior vice president Farley Noble told The Globe and Mail last year that the company was targeting tech firms struggling to turn profitable after raising venture dollars.

Feature image courtesy Nikon Corporation via Unsplash.