IRIS Software Group valued at £3.15bn in investment deal with LGP

In a significant development for the software and services industry, IRIS Software Group (IRIS), a leader in providing essential software and services in various sectors, has reached a pivotal moment. The company announced securing a co-controlling investment from LGP (Leonard Green & Partners), a prominent Los Angeles-based private equity firm. This investment values IRIS at an impressive Enterprise Value (EV) of around £3.15 billion.

LGP and Hg: A Strategic Partnership:

This strategic investment sees LGP acquiring a co-controlling stake in IRIS, marking a significant step in supporting IRIS’s expansion ambitions in the US market. Hg, a seasoned investor in European and transatlantic software and services businesses, retains its co-controlling stake in IRIS, a testament to its 20-year relationship with the company and its transatlantic capabilities. In addition to LGP and Hg, ICG will continue as a minority investor.

IRIS’s Market Position and Growth:

IRIS stands out in the market for its long-term customer relationships, with 80% of its clientele remaining loyal for five years or more. The company has seen substantial growth over the past five years, both organically and through strategic acquisitions. This growth has been reflected in its impressive revenue and EBITDA growth rates of 20% CAGR. Notably, IRIS has expanded its footprint in North America, now accounting for over 25% of its group revenues.

Leadership’s Perspective:

Elona Mortimer-Zhika, CEO of IRIS, expressed confidence in the investment, highlighting IRIS’s success and the significant role LGP’s expertise will play in its transatlantic business growth. Usama Cortas, Partner at LGP, echoed this sentiment, emphasizing IRIS’s leadership and value-based culture as key factors in their investment decision.

IRIS’s Impact and Future Prospects:

IRIS has evolved significantly since its inception 45 years ago, starting with accountancy software. Today, it is a major player, handling $18 billion in payroll payments annually in the US and Canada and processing six million pay slips worldwide each month. Its influence extends to the UK education sector, where its software suite serves over 12,000 schools and academies.

Closing and Advisory Details:

The deal is set to close subject to customary regulatory clearances. Various esteemed corporate finance and legal advisors were involved in facilitating this landmark transaction.