Financing Systems: Inspiring a Finance Software Provider to Grow Through Acquisition

What happens when the major shareholder of a company is no longer around?

Apak Systems Inc. – now known as Constellation Financing Systems – had to tackle this very question when one of its five shareholders passed away in 2001.

To give the company a chance to succeed, the remaining four minority shareholders, including the company’s current General Manager, David Taylor, set out to sell Apak to an organization that would ensure its long-term growth and stability.

That organization turned out to be Perseus, an operating group of Constellation Software. It provided Apak with the knowledge and resources to acquire Finance Edge, FTI, Casitron and Covarity, allowing it to become what is known today as Constellation Financing Systems.

“Like the rest of Constellation Software, Perseus is transparent, ethical and highly successful. I don’t think you can ask for more.” David Taylor, the General Manager of Constellation Financing Systems

Providing Leading Finance Solutions to Businesses Across North America

Constellation Financing Systems is a leading provider of customer relationship management (CRM), origination, credit, document management, leasing and loan management software and related services to North American banks, manufacturer-owned finance companies, and more recently, independent finance firms and non-traditional lenders.

Its core product is called ASSET – a back-office program that manages lease and loan contracts from origination through all the stages of life to termination, with the flexibility to integrate with any general ledger the customer chooses.

In addition to ASSET, Constellation Financing Systems offers Edge, a full-featured transaction origination platform focused on asset finance, Covarity, commercial loan monitoring and analysis software, and Casitron, a lease/loan accounting and management system.

Constellation Financing Systems came into being in 2008, when Perseus acquired Apak Systems Inc. Today, the company has over 90 customers, supporting them from its offices in Ontario and Florida.

Making a Sale

When the majority shareholder of Apak Systems Inc. had passed on, the remaining shareholders had to tackle the difficult task of making the company more attractive to prospective buyers – particularly those that would be willing to invest in its continued growth.

“When the majority shareholder passed away in 2001, we had a responsibility to his family and the company to achieve a sale,” said David Taylor. “Since we were based in the UK, we found it tough to attract buyers who were interested in maintaining our Canadian division. Many of them thought it wasn’t profitable and didn’t want to buy it. But, we weren’t going to give up.”.

Growing Through Acquisition

It took Taylor and the rest of the directors around seven years since the majority shareholder’s passing to find an organization that would take good care of Apak and its Canadian division. That organization was Perseus.

“By 2007, we had retained our biggest customers,” said Taylor. “Perseus was very impressed with what we had achieved and chose to invest in us, believing that our management team would deliver a strong return on investment down the road. That’s how our relationship started.”

Getting the necessary support.

Once Apak joined Perseus, it was able to gain the resources and know-how that would eventually help it achieve stability and growth.

“Perseus allowed me to do business in Canada and gave me access to enough capital to pull that off,” said Taylor. “Perseus also provided me with the metrics to measure success or failure. It’s nice to know that if you hit certain numbers, your business will be judged as successful.”

Taylor, who stayed at Apak as its General Manager, was also pleased with the fact that Perseus allowed him to try out a number of different business models.

“We were able to see what was appropriate for our market,” said Taylor. “We then took what worked for us and passed on the stuff that didn’t. After that, we shared what worked for us with other businesses.”

Making four additional acquisitions

After establishing proper metrics, the next mission for Financing Systems was to grow, which it achieved by acquiring four software companies – Finance Edge, FTI, Casitron and Covarity – with Taylor leading the process.

As a result, Financing Systems now offers four distinct software solutions, which provides it with cross-selling capabilities and allows it to attract and retain customers across a wide variety of markets.

“These four businesses currently comprise the Financing Systems business unit,” said Taylor. “Their software solutions are now integral to our identity as a company. There’s a reason why we are no longer called Apak, and that’s because we’ve evolved into something else.”

Retaining original employees

Financing Systems was able to find success by retaining most of its original employees, including David Taylor, who became instrumental in acquiring the four businesses that currently comprise the company.

“I didn’t know a whole lot about Perseus when we first joined it,” said Taylor. “Frankly, I thought I would only last a few months and get replaced by someone younger. Luckily, I was wrong.”

Financing Systems was just as courteous with the acquisitions of its own, allowing Finance Edge, FTI, Casitron and Covarity to retain their employees as well.

“None have left us,” said Taylor. “This was tremendously helpful to us because all those people were already familiar with their respective products and customer bases, which made it easier for us to sell and improve those products.”

What’s in Store for the Future?

So far, Constellation Financing Systems shows no signs of slowing down. That’s why it foresees additional acquisitions as well as further growth for its existing businesses in the near future.

“All the businesses that we acquired are in great shape now,” said Taylor. “More importantly, they have a path to a successful future. There’s nowhere to go but up.”

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