Acquisitions that still fit fifteen years later

I am chief strategy officer of Sorrelgate Software Holdings Inc., a fictional Ottawa company listed on the TSX. We buy small software businesses that serve one kind of customer well, such as a county clerk's office, a court registry, a grain co-operative or a building-supply dealer, and we intend to keep them. In 2025 our 128 business units earned C$1.38 billion of revenue, 62 per cent of it recurring, and employed 7,400 people. More than half of that revenue comes from public bodies, and just over a third from the United States.

My job is to decide, with our chief executive and our board, where Sorrelgate puts the roughly C$250 million of free cash flow it produces each year, and on what terms. I run central corporate development, chair the review of every acquisition between C$20 million and C$75 million and keep the record of how past purchases have performed against the returns we promised ourselves. I came to this from the selling side of government technology: four years advising on technology mergers in Toronto, then five pricing bids for an Ottawa systems integrator, before I joined Sorrelgate in 2007 to buy businesses.

The questions that occupy me are ones a decentralised acquirer usually prefers to leave unasked. When should a company that promises never to sell actually sell? How much should we pay for revenue that depends on how a provincial ministry or a US county decides to buy? When public customers insist their records stay in Canada, how far should head office overrule a general manager? And when artificial intelligence takes hours out of an implementation, who should keep the saving? I have answered each at some cost, and I describe the costs here as plainly as the results.

Current focus

I am preparing our board's 2027 review of capital allocation, which asks whether an 18 per cent after-tax hurdle written for C$10 million purchases still fits now that a growing share of the businesses we see are priced above C$50 million. I am also working out how shorter, AI-assisted implementations should change the way we explain maintenance fees that our public-sector customers have paid for twenty years.

Conversations I welcome

I would consider a chief executive role at a Canadian software or technology services company with revenue between C$300 million and C$1.5 billion, and one independent board seat outside software, subject to our chief executive's agreement and a conflict review. I accept a few advisory and speaking conversations each year on acquisition discipline and public-sector technology.