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Constellation Software Inc. Files Final Prospectus in Relation to Previously Announced Rights Offering of Debentures

TORONTO, ONTARIO -- (Marketwired) -- 08/08/14 -- Constellation Software Inc. (TSX:CSU) (the "Company") has announced that it has filed a final short form prospectus (the "Final Prospectus") in relation to its previously announced rights offering (the "Rights Offering") pursuant to which the Company will distribute rights (the "Rights") that will entitle holders of common shares ("Common Shares") of the Company (the "Shareholders") as of the close of business on August 21, 2014 (the "Record Date") to purchase up to C$100 million aggregate principal amount of unsecured subordinated floating rate debentures of the Company (the "Debentures"). There is no minimum principal amount of Debentures that must be issuable upon the exercise of Rights.

The net proceeds of the Rights Offering are expected to be used by the Company to pay down a portion of the outstanding indebtedness under its existing credit facility (the "Credit Facility").

Under the terms of the Rights Offering, Shareholders will receive one Right for each Common Share held. For every 21.192 Rights held, the holder of such Rights will be entitled to subscribe for C$100 principal amount of Debentures. The Rights and the Debentures have been qualified for distribution in each province and territory of Canada by way of the Final Prospectus and the Debentures have been registered in the United States on Form F-7 under the United States Securities Act of 1933, as amended.

The Rights will be exercisable until 4:30 p.m. (Toronto time) (the "Expiry Time") on November 7, 2014 (the "Expiry Date") at a price of C$95.00 per C$100 principal amount of Debentures purchased. Rights not fully exercised prior to the Expiry Time on the Expiry Date will be void and of no further value.

The Rights will be listed on the Toronto Stock Exchange (the "TSX") under the symbol "CSU.RT" and will be posted for trading on the TSX until 12:00 p.m. (Toronto time) on the Expiry Date, at which time they will be halted from trading. The TSX has approved the listing of the Debentures, subject to the Company fulfilling all of the requirements of the TSX.

The Debentures will be issued as a single series, in two tranches, and will have a maturity date of March 31, 2040 (the "Maturity Date"). The first tranche will be issued on October 1, 2014 (the "First Issue Date") and the second tranche will be issued on November 19, 2014 (the "Second Issue Date"). Holders of Rights who exercise their Rights on or prior to September 22, 2014 (the "Early Exercise Date") will be issued their Debentures on the First Issue Date. Holders of Rights who exercise their Rights after the Early Exercise Date will be issued their Debentures on the Second Issue Date. Holders of Rights who exercise their Rights after the Early Exercise Date but prior to the Expiry Time will be required to pay accrued and unpaid interest on the Debentures in the amount of C$0.9934 per C$100 principal amount of Debentures in addition to the subscription price of C$95.00 per C$100 principal amount of Debentures. The Debentures will not be listed, or begin trading on the TSX until the Second Issue Date.

The Debentures will be issuable only in denominations of C$100 and integral multiples thereof and, from and including the initial date of issue of October 1, 2014 to but excluding March 31, 2015, will bear interest at a rate of 7.4% per annum (the "Initial Rate"). From and including March 31, 2015 to but excluding the Maturity Date, the interest rate applicable to the Debentures will be reset on an annual basis on March 31 of each year, at a rate equal to the annual average percentage change in the All-items Consumer Price Index during the 12 month period ending on December 31 in the prior year (which amount may be positive or negative) plus 6.5% (the "Floating Interest Rate"). Notwithstanding the foregoing, the interest rate applicable to the Debentures will not be less than 0%. Interest, if any, will be payable quarterly in arrears in equal instalments on March 31, June 30, September 30 and December 31 in each year, commencing on December 31, 2014. Holders of Debentures at the close of business on the business day prior to an interest payment date will be entitled to receive the interest payment in respect of such quarter. The first interest payment payable on December 31, 2014 will include interest accrued from and including the First Issue Date to but excluding December 31, 2014 and will be in the amount of C$1.8449 per C$100 principal amount of Debentures. The Initial Rate will only apply to the Debentures in respect of the first and second interest payments on December 31, 2014 and March 31, 2015, respectively. Effective March 31, 2015, the interest rate payable on the Debentures will be based on the applicable Floating Interest Rate.

All payments in respect of the Debentures will be subordinated in right of payment to the prior payment in full of all senior indebtedness of the Company, which includes the Credit Facility.

During the period beginning on March 16 and ending on March 31 of each year, the Company will have the right, at its option, to give notice to holders of Debentures of its intention to redeem the Debentures, in whole or in part, on March 31 in the year that is five years following the year in which notice is given, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the date fixed for redemption. For example, if the Company chooses to exercise its right to redeem the Debentures in March 2015, the Company would be required to deliver notice of such redemption to holders of Debentures during the period beginning on March 16, 2015 and ending on March 31, 2015, and the effective date of redemption would be March 31, 2020. Given the foregoing, the first possible redemption date is March 31, 2020.

During the period beginning on March 1 and ending on March 15 of each year, holders of Debentures will have the right, at their option, to give notice to the Company of their intention to require the Company to repurchase (or to "put") the Debentures, in whole or in part, on March 31 in the year that is five years following the year in which notice is given, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the date fixed for repurchase. For example, if a holder of Debentures chooses to exercise its right to have the Company repurchase such holder's Debentures in March 2015, the holder would be required to deliver notice of such repurchase to the Company during the period beginning on March 1, 2015 and ending on March 15, 2015, and the effective date of repurchase would be March 31, 2020. Given the foregoing, the first possible repurchase date is March 31, 2020. Once a holder of Debentures exercises its put right, such Debentures will be deposited in escrow with the trustee and will no longer be transferable over the facilities of the TSX or otherwise.

The Company's ability to redeem or repurchase the Debentures will be subject to compliance with the terms of its senior indebtedness, including the Credit Facility, at the time of redemption or repurchase.

A copy of the Final Prospectus and, in the case of eligible Shareholders, Rights certificates representing the Rights to which they are entitled will be mailed to registered Shareholders following the Record Date. Registered Shareholders wishing to exercise their Rights must forward the completed Rights Certificates along with the applicable subscription proceeds to Computershare Trust Company of Canada by no later than the Expiry Time. Shareholders who hold their Common Shares through an intermediary will receive materials and instructions from their intermediary.

Further details regarding the Rights Offering can be found in the Final Prospectus which has been filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Alternatively, copies of the Final Prospectus may be obtained by contacting Jamal Baksh at 20 Adelaide Street East, Suite 1200, Toronto, Ontario, M5C 2T6 or by calling 416-861-9677.

Forward Looking Statements

The statements contained in this press release which are not historical facts are forward-looking statements, which involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Words such as "may", "will", "expect", "believe", "plan", "intend", "should", "anticipate" and other similar terminology are intended to identify forward-looking statements. These statements reflect current assumptions and expectations regarding future events and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements.

About Constellation Software Inc.

The Common Shares are listed on the TSX under the symbol "CSU". The Company acquires, manages and builds vertical market software businesses.

Contacts:
Constellation Software Inc.
Jamal Baksh
Chief Financial Officer
416-861-9677
[email protected]
www.csisoftware.com

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