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CONSTELLATION SOFTWARE INC . TO OUR SHAREHOLDERS One of our directors has been calling me irresponsible for years . His thesis goes like this : CSI can invest capital more effectively than the vast majority of CSI's shareholders , hence we should stop paying dividends and invest all of the cash that we produce , even if it means lowering our hurdle rates . I used to argue that we needed to maintain our hurdle rates because dropping them for a few marginal capital deployments would cause the returns on our entire portfolio to drop . The evidence supported my contention , so we kept the rates high for small and mid - sized vertical market software ( " VMS " ) acquisitions and made very few exceptions for large VMS acquisitions . The by - product of that discipline has been a perennial inability to invest all of the cash that we generate . What have we done with that excess free cash flow available to shareholders ( " FCFA2S " ) ? Historically , we have paid three special dividends , and for the last decade we have also paid a regular quarterly dividend . I have stopped arguing . I have converted , and with the fervour of the newly converted , I am busy demonstrating my new - found faith . The obvious first step is to stop special dividends in all but the most compelling circumstances . That decision was made by our directors at Friday's CSI board meeting . We have maintained the quarterly dividend for now , but if we are successful in finding better uses for our FCFA2S , the quarterly dividend will also be sacrificed . We will continue to invest most of CSI's FCFA2S in small and mid - sized VMS acquisitions at our traditional hurdle rates . Our Operating Group Managers have done a spectacular job of growing CSI's market share of acquisitions within this portion of the VMS sector , without succumbing to the siren song of increased centralisation , bureaucracy , and control . Most of these businesses are blessed with big moats and long - tenured employees and customers . The Operating Groups provide a low overhead environment where autonomy , collegiality , and shared knowledge are the cultural norm , and good people thrive . I am incredibly proud of what they have accomplished . At head office our original objective was to be " good perpetual owners of VMS businesses " . Our success forced us to delegate that task to the Operating Groups . Head Office now needs to become a " good steward of our investors ' capital " . To that end , we are working on two initiatives : 1 ) increasing the number of very large VMS businesses ( i.e. , those requiring multi hundred - million - dollar equity cheques ) that we pursue , and 2 ) developing a circle of investing competence outside of the VMS sphere . For many years , we have tracked large VMS acquisition prospects as a separate segment of the market . We have invested less than 10 % of our FCFA2S in this segment , making only three large VMS acquisitions during our entire 26 year history . Between 40 and 70 large VMS businesses are sold each year . The vast majority of these transactions are marketed to prospective buyers by less than a dozen major merger and acquisition ( " M & A " ) brokers . Over the last five years , we were aware of about 80 % of the large