Mr. Jamal Baksh reports

CONSTELLATION SOFTWARE INC. ANNOUNCES DECLARATION OF WARRANT DIVIDEND

Constellation Software Inc. has resolved to pay a special dividend, pursuant to which all common shareholders of record on Aug. 24, 2023, will be entitled to receive, by way of a dividend in kind, one warrant of the company for each common share of the company held. More information about the features of the warrants is included herein.

The payment date for the warrant dividend is expected to be on or about Aug. 29, 2023. The common shares will commence trading on an ex dividend basis at the opening of markets on Aug. 23, 2023.

Separately, the company has recently announced its intention to issue up to an additional $700-million aggregate principal amount of unsecured subordinated floating-rate debentures, Series 1, of the company, pursuant to a rights offering. The Series 1 debentures issued pursuant to the rights offering are expected to be issued as an additional tranche of, and treated as a single series with, the currently outstanding $282.2-million aggregate principal amount of Series 1 debentures.

The Series 1 debentures contain a company redemption right, which is an existing right of the company contained in the trust indenture (as supplemented) governing the Series 1 debentures, and is described in the prospectuses filed by the company in 2014, 2015 and 2023 in connection with the distribution of Series 1 debentures. Pursuant to the company redemption right, the Series 1 debentures are redeemable at the company's option annually, during a specified period, upon no more than five years and 15 days and no less than five years notice.

The warrants will not be exercisable by the holders thereof unless and until the company exercises the company redemption right in respect of the Series 1 debentures. If the company exercises the company redemption right, each warrant will become exercisable by the holder thereof for a period of 30 calendar days starting from the date that the company provides notice to the holders of its Series 1 debentures that the company is exercising the company redemption right to redeem Series 1 debentures.

Following notice by the company of the exercise of the company redemption right, each warrant will, upon exercise, entitle the holder thereof to receive, on the 10th business day following the last date of the warrant exercise period $100 principal amount of unsecured subordinated floating-rate debentures, Series 2, of the company for each $100 principal amount of Series 1 debentures tendered for repurchase by the company.

The company will pay any accrued and unpaid interest on the Series 1 debentures tendered for repurchase up to, but excluding, the Series 2 issuance date. Other than tendering the Series 1 debentures for repurchase, no additional exercise price will be owing by a holder of a warrant upon the exercise of a warrant.

The Series 2 debentures will be identical in all material respects to the Series 1 debentures, except that the Series 2 debentures will not include a company redemption right. Since the Series 2 debentures will not contain a company redemption right, the company anticipates that the exercise by holders of the warrants would neutralize the impact of an exercise of the company redemption right in respect of the corresponding principal amount of Series 1 debentures.

The company has no current intention to exercise the company redemption right under the Series 1 debentures.

The warrants will not be listed on the Toronto Stock Exchange or any other exchange at the time of issuance. If and when the company redemption right is exercised, the company plans to apply to list the warrants on the TSX, so that the warrants would trade on the TSX during the warrant exercise period. The company's ability to list the warrants will be subject to the approval of the TSX at such time.

All unexercised warrants will expire on the earlier of: (i) the first date on which all the outstanding Series 1 debentures have matured or have otherwise been repurchased, redeemed or cancelled; and (ii) March 31, 2040.

Following the distribution of the warrant dividend, there will be 21,191,530 warrants outstanding. The company currently has 2,822,869 Series 1 debentures outstanding, and it intends to issue additional Series 1 debentures from time to time, including in the near term, pursuant to the rights offering. The company intends to ensure that the number of warrants outstanding at any given time will significantly exceed the number of Series 1 debentures outstanding at any given time.

In addition, if and when the company redemption right is exercised, the company plans to attempt to ensure warrants are available to be acquired by any holder of Series 1 debentures who wants to acquire them.

The company has determined that the warrants will have a nominal fair market value of 0.01 cent per warrant at the time of the warrant dividend.

At the time the warrants are issued, they should generally be qualified investments under the Income Tax Act (Canada) for a trust governed by a registered retirement savings plan, deferred profit sharing plan, registered retirement income fund, registered education savings plan, registered disability savings plan and a tax-free savings account. However, the company makes no assurances that the Canada Revenue Agency would not take a different view. Accordingly, holders who intend to hold the warrants in any such plan should consult their own tax advisers.

About Constellation Software Inc.

The common shares are listed on the Toronto Stock Exchange under the symbol CSU. The Series 1 debentures are listed on the TSX under the symbol CSU.DB. The company acquires, manages and builds vertical market software businesses.

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