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Constellation Software is money in the bank, this fund manager says

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If you’re looking for a long-term hold in Canadian tech then Constellation Software (Constellation Software Stock Quote, Chart, News, Analysts, Financials TSX:CSU) should definitely be on your radar. So says Jason Del Vicario of Hillside Wealth Management who likes not only Constellation but its recent spin-off Topicus (Topicus Stock Quote, Chart, News, Analysts, Financials TSXV:TOI) which Del Vicario says could do even better than CSU over the next ten years.

Software consolidator Constellation has been running on the same game plan for years, buying small vertical market software companies providing so-called mission critical software solutions globally. Over the years CSU has completed over 500 such acquisitions, buying the top names in their respective niche verticals and then using its clout and breadth to grow the business and expand into new markets. The resulting cash flow is then plowed back into more acquisitions and the cycle repeats.

The strategy has worked wonders for Constellation, which has grown its revenue from $631 million in 2010 to almost $4 billion for 2020 while taking earnings from $4.12 per share in 2010 to $20.59 per share this past year.

Shareholders were given a special treat last month when Constellation spun out recently acquired Topicus, giving CSU owners about 1.9 Topicus shares for every Constellation share as a dividend-in-kind. Constellation bought Netherlands-based software company Total Specific Solutions BV (or TSS) in 2013 and that subsidiary recently acquired Topicus BV, a Dutch information service company focusing on sectors such as healthcare, education and finance.

Topicus was singled out by Constellation founder Mark Leonard for its ability to grow without using outside shareholder funding. Leonard said the spin-out was part of the intention since a purchase agreement was struck last year.

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Canadian Tire and NuPort Robotics to commercialize Canada’s first automated heavy duty trucks

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Canadian Tire Corporation and Toronto based start-up NuPort Robotics, Canada’s first autonomous trucking company, are partnering with the Ontario government to invest $3 million to undertake an automated heavy duty trucking project to test a “first-of-its-kind-in-the-world” technology. 

The breakthrough technology provides a transportation solution for the middle mile, the short-haul shuttle runs that semi-tractor trailers make between distribution centres, warehouses and terminals each day.

It is designed to enable next-generation automated trucks that are more fuel efficient, safer to operate, and provide an enhanced driver experience.

Backed by $1 million in support from the Ontario government through Ontario’s Autonomous Vehicle Innovation Network and matched by $1 million investments from Canadian Tire and NuPort Robotics, respectively, the two-year project is applying proprietary, artificial intelligence technology from NuPort Robotics to retrofit two conventional semi-tractor trailers – which will always be attended by a driver – with high-tech sensors and controls, a touchscreen navigation system, and other advanced features such as obstacle and collision avoidance.

Caroline Mulroney, Minister of Transportation, says: “Ontario is proud to be a global leader in automated and connected vehicle technology and this innovative project is an exciting milestone toward automated vehicle tech in the trucking industry.

“Ontarians rely on goods being delivered by trucks across the province every day and projects like this are demonstrating the ways that automated truck technology could help businesses meet delivery demands more efficiently while supporting a strong supply chain in Ontario.”

Vic Fedeli, Ontario Minister of Economic Development, Job Creation and Trade, says: “This project applies unique and made-in-Ontario Artificial Intelligence technology that offers increased safety and efficiency, with a reduced carbon footprint, to the goods supply chains on which we all rely.

“This is the latest example of how Ontario’s Autonomous Vehicle Innovation Network acts as a catalyst, fostering partnerships between ambitious technology start-ups and industry to develop and commercialize next generation transportation technologies that strengthen our economy and benefit society.”

Raghavender Sahdev, CEO of NuPort Robotics, says: “The trucks are currently transporting goods between a Canadian Tire distribution centre in the Greater Toronto Area and nearby rail terminals within a 12.5 mile radius, and early results are promising.

“The aim of the project is to develop a system that incorporates an autopilot feature for conventional trucks with a driver, leading to the most efficient way to drive and increase safety.

“The sensors work as a ‘safety cocoon’ to cover blind spots and prevent accidents and the end result is peak fuel efficiency, meaning lower carbon emissions, and peak driving performance for an overall more optimal transportation experience.”

NuPort Robotic’s approach to autonomous trucking is unique in the industry because it focuses only on solving the middle mile challenge, using a known set of predetermined trucking routes that are repetitive and high frequency as opposed to general highway driving.

Ultimately, when implemented on fixed routes in the future, Canadian Tire will benefit from faster commercial deployments and improvements in supply chain sustainability.

Gary Fast, vice-president of transportation, Canadian Tire, says: “Canadian Tire embraces innovation and is always testing new technologies to improve our operational efficiency and safety.

“As proud Canadian companies, the safety of all stakeholders, including drivers, employees, customers, and public will be the top priority as we work together towards deployment of this technology.”

Cari Covent, vice president of intelligent automation, Canadian Tire, says: “Over the last three years, Canadian Tire has made a significant effort to solve complex business problems by using the Canadian start-up Artificial Intelligence ecosystem, and NuPort Robotics exemplifies what we look for in a start-up with a focus on innovation, automation and artificial intelligence.”

Sahdev says: “As NuPort Robotics continues to develop new technologies to overcome middle mile supply chain problems and advance autonomous trucking, I am extremely grateful for the support of the Ontario Government through AVIN and the Ontario Centre of Innovation.

“With their continued support, we are striving to position Canada as the leader in autonomous transportation.”

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Nuvei wins price target raise from National Bank

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Strong quarterly results and an even brighter outlook for 2021 are reasons to celebrate for Canadian payments company Nuvei (Nuvei Stock Quote, Chart, News, Analysts, Financials TSX:NVEI), according to National Bank Financial analyst Richard Tse. In an update to clients on Wednesday, Tse left his rating unchanged at “Outperform” while raising his price target from C$85.00 to C$100.00.

Montreal-headquartered Nuvei is a provider of payment technology solutions to merchants and partners around the world, with a platform geared for high-growth mobile commerce and e-commerce markets. Nuvei’s solutions include a fully integrated payments engine with global processing capabilities, a turnkey checkout solution and a suite of data-driven business intelligence and risk management tools and services.

The company released its fourth quarter and full year 2020 financials on Wednesday, showing Q4 revenue of $115.9 million, up 46 per cent year-over-year, and adjusted EBITDA of $51.3 million, up 61 per cent year-over-year. Total dollar value of transactions processed by merchants (‘total volume’) with Nuvei rose by 53 per cent to $13.9 billion. (All figures in US dollars except where noted otherwise.)

The 2020 year featured revenue up 53 per cent to $375.0 million and adjusted EBITDA up 87 per cent to $163.0 million, with total volume rising a full 76 per cent year-over-year to $43.2 billion.

“Our performance continues to be driven by strong momentum in the high-growth verticals we serve, as well as by our customizable, scalable and feature-rich technology platform which provides one of the industry’s most complete payment technology solutions going well beyond merchant acquiring,” said Philip Fayer, chairman and CEO, in a press release.

The company said the fourth quarter represented the strongest growth yet experienced by Nuvei, driven by wallet share expansion from current merchants along with accelerated uptake of new merchants. New e-commerce business almost tripled compared to a year earlier, Nuvei said, while the company expanded its connectivity coverage over the quarter, introduced new product innovations on its platform and continued to execute on M&A.

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Greensoil PropTech Ventures Announces Initial Closing of Its USD $100 Million Fund II backed by Institutional and Real Estate Investors

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TORONTO, March 15, 2021 /PRNewswire/ — Greensoil PropTech Ventures announced today the launch of Greensoil PropTech Ventures Fund II LP, investing in technologies to make the real estate industry more profitable and sustainable. The fund’s first closing, plus additional commitments, represents about half of its USD $100M target. The largest asset class on the planet, the real estate sector is undergoing systemic change as it goes digital, driving increased adoption of technologies to increase returns and mitigate risk.

The Fund’s mandate is to invest entirely in PropTech, utilizing the firm’s longstanding industry relationships, including many of its Limited Partners, to find and invest in technologies compelling to customers in the real estate sector. In many cases, prospective portfolio company solutions are piloted with one of Greensoil’s Limited Partners before the fund makes an investment.

“As leading industry experts, we have been profitably bringing innovation and sustainability to the built environment for decades,” said Alan Greenberg, Co-Founder and Chairman of Greensoil PropTech Ventures. “Our diverse experience as real estate owners, developers and venture investors gives us an advantage unmatched by generalist VC firms. This unique vantage point will allow us to lead the industry’s adoption of the next generation of technologies – what we call PropTech 2.0.”

The Fund’s first closing is anchored by the Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers. Joining PSP Investments are several new and returning investors from the real estate sector, including an affiliate of Starlight Investments, a North American multi-family and Canadian commercial real estate company with $20 billion of assets under management.

“The initial closing of Greensoil PropTech Ventures Fund II comes at a time of significant opportunity and adversity for the real estate industry and the global economy and the need for innovation has never been greater,” said Kristopher Wojtecki, Managing Director, Real Estate Investments, PSP Investments. “PSP’s partnership with Greensoil, and anchor investment in Fund II, reflects our confidence in their PropTech leadership and investment track record.”

“At Starlight, we have been growing our real estate portfolio rapidly and sustainably to become the largest owner of rental units in Canada,” said Daniel Drimmer, Founder and CEO of Starlight Investments. “We are excited to partner with Greensoil PropTech Ventures to source, finance and deploy solutions into our buildings. We believe our commitment to GSPV Fund II will help us extend our market leadership and generate high investment returns.”

“From its origins of largely hardware-focused technologies to reduce facility operating costs, PropTech is exploding into a myriad of technologies, leveraging the cloud, machine learning and SaaS business models to provide real estate-specific use cases,” said David Harris Kolada, Managing Partner of Greensoil PropTech Ventures and fund manager of GSPV II. “With our new fund, we will be financing opportunities resulting from the digital disruption of the entire real estate value chain.” Joining GSPV in 2019, David brings a 25-year track record of investing and leading software and industrial technology companies.

In 2015, Greensoil launched one of the world’s first venture capital funds focused entirely on real estate technology, now known as PropTech. Since that time, PropTech has become one of the largest and fastest growing VC segments, with close to US $25 billion of venture capital financing going to PropTech companies in 2020.

Real estate companies with over $5 trillion under management globally have signed on to net zero carbon commitments by 2030 and 2050. To help achieve these carbon reduction goals, the Fund will invest in high growth technology companies with an accretive business case to property owners, and strong environmental returns for the planet.

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