HgCapital Trust plc will participate in the acquisition of a majority stake in IRIS Software Group Limited (“IRIS”) alongside other institutional clients of HgCapital. The Trust, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital’s investments. IRIS will be split into two entirely separate companies, being Iris Accountancy Solutions and Iris Software Group. The Trust will contribute a net total of approximately £26.5 million, split between the two separate companies.  

Based on the 30 November 2011 NAV and the impact of this transaction, liquid resources are estimated to be £72.7 million (20% of the 30 November 2011 NAV) and the Trust’s outstanding commitments to HgCapital funds is £247.1 million.

HgCapital, the European sector-focused private equity investor, has announced that, following the separation of IRIS into two operating businesses; IRIS Accountancy Solutions (“IAS”) and IRIS Software Group (“ISG”) , it has acquired a majority stake in both independent businesses, from the US-based private equity firm, Hellman & Friedman. HgCapital has held a stake in IRIS since 2004, and has been a minority shareholder alongside Hellman & Friedman since 2007. IRIS Accountancy Solutions is the UK’s leading provider of specialist applications software and solutions to the UK Accountancy and Payroll sectors, whilst IRIS Software Group primarily operates in various other vertical software markets.

This investment represents a continuation of HgCapital’s thematic, sector-driven investment strategy, representing HgCapital’s seventh investment in the regulatory-driven SME software sector. HgCapital has built a reputation as a partner of choice for regulatory-driven SME businesses, which benefit from above-GDP growth trends, low customer churn rates, and contracted earnings models. HgCapital’s other current investments in the sector include TeamSystem in Italy, and Visma in Norway, and its previous investments include Addison in Germany.  HgCapital intends to use this experience to support the management teams of the two new IRIS companies as they continue to grow their businesses.

Nick Discombe, who remains as Chairman of both companies, said, “This represents a significant vote of confidence from HgCapital.  They have a good understanding of the strengths and market positions of IRIS Accountancy Solutions and IRIS Software Group and their expanded investment demonstrates their belief that we can achieve further significant growth.”