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Vinasty heading for a second act ?

If you are wondering what happened to Vin Murria after she sold CSG to the IRIS Group, then read this new posting by IT industry analyst Richard Holoway on his Holoway's HotViews blog – http://hotviews.blogspot.com

“My involvement with Vin Murria came about through Elderstreet
where she is a Director and I am an adviser to one of their funds.
Indeed, our investment in Computer Software Group (CSG) – where Michael
Jackson served as Chairman and Vin Murria as CEO – was the most
successful for the fund when it was sold to HG Capital in March 2007
for c£100m. CSG was a consolidation play in the legal, not-for-profit,
membership arena – and it worked very well for shareholders. Jackson
and Murria stayed with the new entity which merged with Iris and was
then sold to Helman & Friedman for c£500m – in hindsight, probably
at the top of the market!


“Well, now the duo are at it again. This time in the UK primary care arena. Via an AIM ‘shell’ called Drury Lane Capital plc, they have acquired (actually it’s a reverse takeover) Adastra for £12.2m (£4.8m in cash, rest in shares). Drury Lane (which I understand will change its name to Advanced Computer Software plc when the deal is consummated) is raising £14.6m by way of a placing of 86m shares at 17p.

“Adastra
was setup in 1994 by Lynn Woods and James Berry (both of whom will
continue post the acquisition). In 2002 they acquired their main
competitor, Owl Software. In the year to 29th Feb 08 Adastra had
revenues of £10.6m, PBT of £1.7m and 150 staff. A significant majority
(>70%) of revenues comes from recurring support revenue and from
software sales to existing clients. Adastra’s main product is a
specialist call management, data distribution and clinical recording
systems for GP out-of-hours or urgent care. Adastra has more than
doubled its revenues in the last five years.


“Adastra has an almost clean sweep of out-of-hours systems in the UK with no direct competition.

“If ever there was a UK market ripe for consolidation it is the Out of Hospital Care area (which goes under the acronym OoH)

“Firstly,
there are a whole array of relatively small companies who service the
area. For example, EMIS (revenues c£50m) is one of the main suppliers
of primary care/GP systems but partners with Adastra on out-of-hours.
There has been speculation in the past that EMIS(*) might itself purchase
Adastra – maybe it will be the other way around now!


“Secondly,
the benefits of ‘cross-selling’, which would accrue if the group was
enlarged, are obvious. Don’t just think doctors – think dentists,
opticians, pharmacists, walk-in-centres, polyclinics (the latest DoH
buzzword) etc


“Thirdly, the current disarray in the NHS IT
Programme might play well with a consolidation exercise. The NHS has
recently given greater flexibility for local trusts to work with local
suppliers of their choice. This can only benefit the smaller
established suppliers over the last remaining LSPs (BT and CSC).


“Lastly,
users of such systems are very loyal. Training and implementation costs
are high so users only change as a last resort. That means that
recurring revenues are both secure and significant – exactly the kind
of model of businesses that work in a consolidation play.


“Clearly,
this is a development I will watch with great interest. If anyone can
pull off a consolidation play in the primary care area, Vin can.”

* The EMIS referred to in this story is the parent company if EMIS IT who operate in the legal IT market.

6 replies on “Vinasty heading for a second act ?”

It does sound as if Vin is scenting success all over again.
Lets hope, for the sake of all involved in the OoH sector especially the end users, Iris and particualrly Arlene do not get their hands on the finished article!

Vin Murria has been in touch to say the full RNS announcement can be found under Drury Lane plc. La Murria ended her note with the gnomic comment that “As you will know. I am locked out of legal for a further year.” Does this mean that at the crack of midnight on 1st August 2009 (or thereabouts) she is going to come sweeping back into the legal IT market like the Fifth Horsewoman of the Apocalypse, spreading fear, uncertainty, doubt and some lucrative buyout deals for some lucky vendors?
* Talking of IRIS, a third-party has informed us that Hooper & Wollen – who were reported as having selected SOS to supply their new PMS (see Legal Tech Insider #211) – were previously a Mountain (now IRIS) FoxPro user, who preferred to move to SOS than upgrade.

erh don't you mean short term success that's unsustainable but hopefully some muppet will come along and take the whole thing on to the detriment of all apart from the shareholders of th eintial vehicle.

Given the press releases from the likes of Axxia, Alphalaw, Eclipse, Linetime, SOS, TFB etc etc it looks like they could have lost over 75 clients already since late 2007. Now that AIM users will feel as disenfranchised as the Mountain base, 200 plus sites will need to make a decision between now and 2011. They appear to be losing clients at a rate of roughly 10 per month…. in three years that will be 360.
Now that everyone appears to know that Legal Enterprise will be a mildly updated version of Legal Office 10, with IRIS’s actual limited resources available despite the rhetoric (given the stretch created by a multitude of products) it doesn't look good for IRIS Legal ….. who knows but in three years time people are already talking about their relegation to a vendor of a relatively small size compared with to today. Difficult to believe …. take a look at the senior management team at CSG only a year ago and how many are left today? The client base is beginning to go the same way and vote with their feet.
To leave you also with a comment on this site from someone close to CSG ‘CSG was a consolidation play in the legal, not-for-profit, membership arena – and it worked very well for shareholders. Jackson and Murria stayed with the new entity which merged with Iris and was then sold to H’lman & Friedman for c£500m – in hindsight, probably at the top of the market!’
£500m of debt looks very risky right now & challenging times lead to knee jerk strategies at the expense of clients and staff………….

I know I shouldn't really reply to a 'comment' that reads likes it's own press release but what the hell. Is it supposed to sound like a sales pitch? Or are you trying and failing to sound like a individual commentor?
£500m 'risky' debt. Kinda flies in the face of recent stories on here saying that H&F are wanting to invest more in various other places. Not exactly tightening the purse strings is it.
Plus, what must be a terrible and inconvenient truth for you is that despite the current difficult market conditions Iris are still indeed making headway and growth in the market. Yes there have been client losses i'm sure, but overall growth still. Nevermind eh!
'…at the expense of clients and staff': as the ongoing recruitment into the various functions at Iris demonstrates.
Finally, as someone who is an individual and not an obvious company mouthpiece I can honestly say that I have seen a great deal of the software offerings in both the Legal and other markets and many of the products within Iris stand up well and above the competition. As the saying goes 'the grass is always greener on the other side' and I feel that many clients that have moved away from particular Iris products will; if not regret it then feel they were very hasty.
You can try and spread as much FUD as you like, but time will definitely prove you wrong.

Um and interesting spat!!
However, trying to take an impartial view it does appear that the general opinion was that IRIS was bought at the peak. Therefore it has similarities to the current state of the housing market… if you bought last July where do you find yourself today, quite possibly in negative equity, hence the general view coming back to IRIS because the corporate market has followed a similar path. H&F and Hg are very well regarded Private Equity firms, however, I suspect if you asked H&F if they'd have done the same deal now at that valuation the answer might not support the previous comment. Yes they will do more deals, they need to to as does any other PE firm, but probably not on that level of gearing.
I'm also surprised by the comment regarding growth within IRIS legal, again this certainly doesn't appear to be the view both internally on the ground and externally. For example you only have to read through previous issues of the Insider to see that shall we say the wins are fairly heavily weighted in favour of the competition.
Whilst perhaps the previous comment is somewhat OTT regarding losses IRIS must be losing at least 5 clients per month at the moment. Clearly IRIS have a different definition of growth than everyone else.
Again trying to take a realistic view it's fair to say that outside of Legal IRIS has an excellent reputation and they have done extremely well over the years. The problem is that the legal world is very small, therefore most of the market, competitors etc know exactly what's going in IRIS Legal and it doesn't look pretty.
Who has the hearts and minds now – well it certainly isn't IRIS legal. Who knows it might well come right but nearly three years on from CSG it doesn't look good and there PR remains terrible.

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