Can a Canadian playbook work in European soil?

The experiment

In January 2021, Constellation Software spun off its European vertical market software operations as Topicus.com. The structure was unusual: Constellation merged its TSS operating group with a Dutch company called Topicus.com B.V., then floated the combined entity on the Toronto Stock Exchange while retaining control through super-voting shares.

The experiment tests a specific question. Mark Leonard’s model — decentralised capital allocation, perpetual ownership, small deals at high hurdle rates — was built in North America over 25 years. Does it transplant?

Four years in, the early evidence is promising. Revenue has grown from €500 million to over €1.3 billion. The acquisition pace exceeds Constellation’s own trajectory at the same stage. But the interesting story isn’t the numbers — it’s what had to change.

Two traditions merged

TSS (Total Specific Solutions) and original Topicus came from different directions.

Robin van Poelje founded TSS in the Netherlands and sold to Constellation in 2014. He learned Leonard’s playbook from the inside, running TSS as one of Constellation’s six operating groups. By 2020, TSS was 14% of Constellation’s revenue but 20% of its acquisitions — the fastest acquirer in the family.

Daan Dijkhuizen’s original Topicus was something different: a “spawner” rather than an acquirer. The company built new software products organically, growing through development rather than M&A. Think Amazon or Alibaba’s approach to new ventures, not Constellation’s buy-and-hold model.

The merger combined both capabilities. Topicus can acquire like TSS always did, but it can also build from scratch when the right opportunity doesn’t exist to buy. This optionality is rare among serial acquirers.

European operators

The leadership question matters. Most serial acquirer spin-offs install parent company executives who learned the system at headquarters. Topicus did something different.

Van Poelje and Dijkhuizen are European operators who joined Constellation’s orbit, not Leonard disciples sent to run a subsidiary. Van Poelje built TSS before selling to Constellation. Dijkhuizen ran original Topicus as an independent company. Both understand European markets, relationships, and deal culture in ways that Toronto headquarters never could.

Leonard sits on the Topicus board, providing governance continuity. But operational decisions flow from Amsterdam, not Canada.

This matters because European software M&A works differently. Markets are more fragmented by country and language. Relationships take longer to build. Founders often care more about legacy and employee welfare than maximising sale price. The founder-friendly positioning that Constellation pioneered in North America requires local operators who can credibly deliver on the promise.

The control structure

Constellation retained control of Topicus through 100% of super-voting shares — a structure that raised eyebrows but clarified incentives. Van Poelje’s Joday Group holds 30.3% of equity, Dijkhuizen’s IJssel holds 9%. Minority shareholders own the rest.

The arrangement acknowledges a tension. Constellation wants Topicus to run Leonard’s playbook without deviation. Local management wants autonomy to adapt. The super-voting structure resolves the conflict: Constellation sets the rules, management executes within them.

For investors, this is either a feature or a bug. The control structure means Topicus won’t drift from the model that made Constellation successful. It also means minority shareholders have limited influence if they disagree with strategic direction.

Four years in, the model hasn’t constrained growth. Whether it would constrain necessary adaptation remains untested.

Faster in greenfield

TSS acquired more aggressively than other Constellation operating groups because Europe offered more opportunity. North American vertical market software has been picked over for decades. European markets remain fragmented — more targets, less competition for deals, founders who haven’t yet heard from every PE firm in existence.

Topicus continues this pace as an independent entity. The company completed dozens of acquisitions annually, building density in markets like healthcare, education, and government software where country-specific regulations create natural barriers.

The acquisition velocity creates its own advantages. More deals mean more data on what works. More portfolio companies mean more internal benchmarks. More managers trained in the system mean more capacity for future deals. The flywheel that Leonard built over 25 years spins faster when the opportunity set is larger.

What’s being tested

Topicus tests several propositions simultaneously.

Can the model export? Constellation’s playbook was built for North American software markets. European markets have different characteristics — more fragmentation, stronger relationships, different regulatory environments. Topicus proves the core principles transfer, but local execution matters.

Can spawning coexist with acquiring? Most serial acquirers buy exclusively. Original Topicus built products organically. The merged entity does both. If this works, it expands the opportunity set beyond what pure acquirers can access.

Can decentralisation cross borders? Constellation pushed capital allocation down to operating groups, then to business units. Topicus extends this across European countries with different languages, cultures, and business practices. The decentralisation must be genuine, not just organisational charts.

Can control and autonomy coexist? Constellation’s super-voting shares ensure the playbook stays intact. Local management runs daily operations. The tension between control and autonomy is structural. The question is whether it produces discipline or friction.

Early returns

The numbers through 2025 suggest the transplant is taking. Revenue growth of 16-19% annually. EBITA margins stable. Acquisition pace maintained. The model appears to work in European soil.

But four years is early. The real test comes when conditions tighten — when good deals become scarce, when competition for targets intensifies, when economic stress reveals which acquisitions were sound and which were fortunate. Constellation faced these tests over 25 years and emerged stronger. Topicus hasn’t yet faced its equivalent trials.

What’s clear already: the playbook travels better than sceptics expected. European founders trust the permanence promise. Local operators can run the system without Toronto oversight. Small deals at high hurdle rates work regardless of geography.

The Constellation model was always about principles, not procedures. Topicus is proving the principles are portable.

Connects to Library: Process Power · Optionality

See also: The Constellation Model — The parent playbook: decentralised capital allocation, perpetual ownership, hurdle rate discipline. The Vitec Approach — Another European VMS acquirer, but with active modernisation rather than hands-off. The Bergman & Beving Legacy — The Swedish tradition of spawning offspring that outperform the parent.