Constellation Software pays for acquisitions mainly from cash it earns, and Teledyne under Henry Singleton paid in stock while its shares traded at a higher multiple than the businesses it bought. As of October 2026, Constellation's filings show capital stock unchanged at $99 million through 2025 and $1,227 million of cash paid for acquisitions that year. Teledyne's record is reported by Fortune and other secondary sources, not filings I could open. The common thread is the test of issuing shares only when you receive as much value as you give.
In outline, yes, but they were different companies in different eras. Constellation Software is a Toronto-listed buyer of vertical-market software businesses. Teledyne here means the conglomerate as Henry Singleton ran it from the 1960s into the 1980s. This article does not discuss today's Teledyne Technologies. Each followed the same logic: spend shares when they are expensive, and avoid them when they are not.
The pattern is that Constellation pays from cash it earns. I read two quarters and one year of releases. I did not review every year of its history, so this article does not claim it has never issued shares.
No Teledyne filing from the 1960s was available to me. The account below comes from Fortune (Carol Loomis, April 29, 1985), written at the time, and from an interview with William Thorndike, author of The Outsiders, which is a secondary source.
I treat these as reported accounts, not audited history.
Three differences explain most of it.
Assumption. A target is bought at 10 times its earnings, so each $1 of target earnings costs $10 of stock.
At 40 times you give up a quarter of a dollar to get a dollar. At 8 times you give up more than you get. That is the whole case for issuing at one time and not at the other. See what share price or P/E makes stock a sensible currency for the full table.
Do not copy the instruction to avoid shares. A small holding company usually lacks the cash flow Constellation has, and sellers often like stock. Copy the test: issue shares only when you receive as much value as you give, and say why. My view is that a plan to issue shares in every deal regardless of price is the weak spot. See the Constellation Software model.
Where these numbers come from: Constellation figures are from its Constellation Software Q1 2025 press release, its Constellation Software Q4 2025 press release and the Constellation Software Q4 2025 release page. Teledyne is reported by Fortune (Carol Loomis, April 29, 1985) and an interview with William Thorndike, author of The Outsiders (secondary sources). The principle quoted is from the Berkshire Hathaway 1983 shareholder letter. The 10x purchase multiple and the 40x and 8x stock multiples are assumptions.
I did not find an equity issuance in the 2025 releases. I did not review earlier years, so I make no claim about them.
No. This article covers only Teledyne in the Singleton years, as Fortune described it in 1985. It makes no claim about today's Teledyne Technologies.
Only if it has spare cash and a stock priced below its value. Most small holding companies are better placed to use shares than to retire them.
For a closer look at one of these companies, see the Teledyne and Singleton case study.
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