IRIS Software Group secures co-controlling investment from LGP in £3.15bn deal

LONDON, UK: IRIS Software Group, a global leader in accountancy, payroll, HR and education software and services, has announced a co-controlling investment from LGP, a Los Angeles-based private equity firm, in a deal that values the company at around £3.15bn.

The deal will support IRIS’s growth in the US market, where it already generates over a quarter of its revenues. Hg, a leading European and transatlantic software investor, will remain a co-controlling shareholder in IRIS, along with ICG as a minority investor.

IRIS has a loyal customer base, with 80% of customers staying with the company for more than five years. The company has grown rapidly in the last five years, both organically and through acquisitions, delivering 20% CAGR in revenue and EBITDA.

HgCapital Trust, a listed vehicle that gives investors access to all Hg’s investments, will receive a net distribution of £42.1m from IRIS, having re-invested some of its proceeds in the business. The deal will reduce HgCapital Trust’s outstanding commitments to invest in Hg transactions to £852m.

Elona Mortimer-Zhika, CEO of IRIS Software, says: “To secure backing from a leading US investor in LGP, alongside the continued support of Hg and ICG, underscores IRIS’s enduring success over many decades. Our unparalleled product portfolios combined with excellent customer service have resulted in IRIS being a leader in our sectors. We have also expanded our country presence with a notable focus on the US, so LGP’s local expertise will be instrumental in our acceleration to a world-class transatlantic business.”

Starting 45 years ago with accountancy software, IRIS has evolved to be relied on by more than 100,000 customers. Today, the business handles $18 billion of payroll payments annually in the US and Canada, and processes six million pay slips worldwide each month. One in six of the UK’s workforce is paid by IRIS payroll offerings, and more than 850,000 UK employees are managed by IRIS HR solutions.”

IRIS has a broad UK education software suite with more than 12,000 UK schools and academies using its solutions. More than 4 million parents and guardians benefit from IRIS’ parent engagement apps to connect with their child’s school, with 300 million messages delivered annually between schools and parents.

Usama Cortas, Partner at LGP, says: “We are incredibly excited to partner with IRIS, whose leadership, value-based culture and reputation for excellence align with the key characteristics we look for in the companies we invest in. We very much look forward to working with Elona and the rest of the management team, as well as Hg and ICG, to accelerate the next phase of IRIS’ growth.

IRIS Software was Hg’s inaugural investment into the Tax & Accounting software sector in 2004. Hg has been an investor in the business ever since, during which time the firm has invested around $10 billion in the wider tax and accounting software segment across Europe and North America.

Nic Humphries, Senior Partner at Hg, says: “IRIS and Hg have a long history, evolving together over the past 20 years. We’re delighted to now partner alongside LGP to accelerate IRIS’ US ambitions. Now, more than ever, we recognise Elona and her team as leading a high-quality software and services business, digitising a sector still in the early stages of its software adoption, with tremendous opportunity still ahead.”

Payroll Software Developer Immedis Acquired by UKG in Deal Facilitated by Terry Clune

Hg invests in CINC Systems, a leading software provider for community association management