US private equity firm secures controlling stake in IRIS Software Group

By Stephen Emerson

3 January 2024

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US investment house Leonard Green & Partners (LGP) has bought a co-controlling stake in IRIS Software Group as the company looks to expand its North American reach.

Los Angeles-based LGP will take a co-controlling stake in the Slough business alongside Hg which will retain its co-controlling investment.

Alternative asset manager Intermediate Capital Group (ICG) will remain involved in IRIS as a minority investor having entered into a joint partnership to run the tech company with Hg in 2018.

The investment represents one of Europe’s largest software buyouts for 2023, valuing IRIS at an Enterprise Value (EV) of around £3.15bn.

Elona Mortimer-Zhika, CEO of IRIS, 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 now has over 100,000 customers 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.

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 was Hg’s inaugural investment into the Tax & Accounting software sector in 2004 and has been an investor in the business ever since.

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.”

Arma Partners and Rothschild & Co acted as corporate finance advisors to Hg. Jefferies International and William Blair acted as financial advisors to LGP. Legal advisors included Skadden and Linklaters for Hg; Latham & Watkins for LGP and Ropes & Gray for ICG.

By Stephen Emerson

Stephen Emerson is the Managing Editor of The Business Magazine and is responsible for the publication's print publications and online properties including the newly launched Biz News websites in Hampshire and Dorset.

Stephen has been a journalist for 20 years and has worked at local, regional and national publications and led a team which made The Scotsman website one of the fastest growing news sites in the UK with over eight million monthly users.

He has a keen interest in technology, property and corporate finance and telling the stories of the people behind the successful firms in these sectors.