RBC Upgrade February 22, 2016 - "Constellation Software Inc. - Unrelenting cash compounding machine": Upgrading to Outperform: Price Target $675 (from $575).... *Our view: We are upgrading Constellation to Outperform based on: 1) M&A re-acceleration appears likely. With the YTD pullback in equity markets, we have greater confidence that Constellations pace of acquisitions is likely to increase. First, distressed companies that own software businesses are more likely to sell in this environment. Second, Constellation may see less competition from private equity buyers. Third, Constellation continues to pursue larger acquisitions. Our outlook calls for Constellation to deploy $300MM capital on acquisitions FY16E, up from $249MM FY15.; 2) Improved visibility to Constellations long-term margin structure; and 3) Constellations valuation re-rating is likely to be sustained. We believe Constellations valuation is likely to remain above the mid-point of its 5-year range and other Canadian tech consolidators, given better investor visibility for Constellations superior ability to compound FCF/share over the long-term. 4) We estimate that only 14% of Constellations 10-year acquisition potential is priced into the shares, too low in our view, given Constellations track record and strategy. Our revised C$675 target assumes 27% of forecast FCF is deployed on acquisitions, which still leaves significant room for upside. 5) Our revised C$675 target equates to 17x CY17E EV/EBITDA (prior 17x CY16E) on $627MM CY17E adj. EBITDA, above peers (13x), justified given Constellations higher long term growth potential.