Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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Best-in-breed compounders take pride in keeping equity dilution to a minimum. Lifco, a $3B revenue Swedish HoldCo, has reported constant share count since the IPO in 2014. Ditto for Constellation Software (CSU). 

And yet, maintaining that discipline is getting harder in 2026 with rising competition for deals and for talent. The solution? Get creative by adopting a “HoldCo of HoldCos” strategy. 

Today, we’re pulling back the curtain on the corporate plumbing of 3 elite serial acquirers: CSU from Canada (via its subsidiary Lumine Group); Chapters Group from Germany; and Röko from Sweden. We will show you how these firms stretch the M&A dollar by pushing down equity dilution to business units or even individual assets.  

CSU - that corporate wizard of binary fission - has already spun out and listed 2 divisions: Topicus in 2021 and Lumine in 2023. More are on the way. Lumine is part of Trapeze, which itself is part of Volaris, one of CSU’s 7 operating groups. Lumine itself is structured in four groups, each comprising between 4 and 18 companies. The upshot is a business doing $800M+ in run-rate revenue. In 2014, that figure was 0. 

This business model is not without faults. 

First, dividend leakage. Second, granting minority shareholders a right to exit fully (e.g. through a put option) creates a debt obligation. Third, spinouts help disguise, but not eliminate, dilution at the parent company level.    

Still, we would argue that “HoldCos of HoldCos” solve two existential challenges of compounders: (a) maintaining a healthy spread between ROIC and WACC against the backdrop of growing invested capital; and (b) remaining competitive vis-a-vis Private Equity.  

In this article, we broke down 3 case studies:

1. Affording 13x EBITDA acquisitions, Constellation Software style 

2. Chapters Group and its “layer cake” capital structure

3. Lifting the curtain on Röko’s “rollup federation” 

Ready? Let’s go!

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1. Affording 13x EBITDA acquisitions, Constellation Software style

CSU is the world's most active software serial acquirer with 500+ completed transactions. This, despite the reputation of a notorious lowball bidder: Buying $100M+ revenue software businesses for 1x? This can be done - if you’re Constellation Software

CSU’s unique insight was to direct dozens of autonomous teams to scour the market for small, cheap deals. The decentralized structure enables operating groups to independently pursue M&A opportunities without directly competing with each other.

Unfortunately, over time CSU became a victim of its own success. Between 2015 and 2025, CSU invested capital base grew roughly 10-fold. Generating a healthy rate of return on a $10B capital stack is incredibly challenging.

A more radical solution was needed: spinouts.  

The Lumine spinout was triggered by the acquisition of WideOrbit, a US VMS that “helps media companies do more business by making it easier to buy and sell advertising”. WideOrbit is a niche champion: a system of record for $33B in advertising spend annually. 

Unlike CreaLogix and Optimal Blue, Constellation’s two other chunky acquisitions, WideOrbit was neither distressed nor in the regulator’s crosshairs. The price paid reflected that: an enterprise value of almost $500M, equivalent to TTM revenue and EBITDA multiples of 3x and 13x, respectively (source).

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