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IRIS Software Group secures major US investment from Leonard Green & Partners

Co-controlling investment will support IRIS as it scales as a global leader in accountancy, payroll, HR and education mission-critical software and services.

Los Angeles, CA, US and London, UK. 23 December 2023. IRIS Software Group (IRIS), a leading global provider of mission-critical software and services in accountancy, payroll, HR and education, today announces it has secured a co-controlling investment from LGP, a Los Angeles-based private equity firm, in a transaction valuing the business at an EV of around £3.15bn.

LGP will take a co-controlling stake in the business, supporting IRIS’s US expansion ambitions with its local presence and network. Hg, a leading investor in European and transatlantic software and services businesses, will retain a co-controlling stake in IRIS in acknowledgement of Hg’s transatlantic capabilities and strong 20-year relationship and experience working with the IRIS team. As part of the transaction, ICG will remain as a minority investor in the business.

With 80% of customers remaining with IRIS for five years or more, the business has firmly established itself as a trusted leader with a strong reputation. This has contributed to significant growth over the last five years, both organically and through acquisitions, enriching and improving its customer offering, whilst delivering revenue and EBITDA growth rates of 20% CAGR. Today IRIS has a rapidly growing presence in North America – which now accounts for over 25% of group revenues.

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.

IRIS 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. 

Closing is subject to customary regulatory clearances.

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.

Contacts

IRIS: UK and US: Sara Lewis | sara.lewis@iris.co.uk

Hg: UK: Tom Eckersley | tom.eckersley@hgcapital.com |

LGP: communications@leonardgreen.com

About IRIS Software Group

IRIS Software Group is a global provider of mission critical software and services, and one of the UK’s largest privately held software companies. IRIS provides software solutions and services for finance, HR and payroll teams, educational organisations, and accountancy firms that takes the pain out of processes and lets professionals focus on the work they love. Through simplifying, automating and providing insights on everyday mission critical tasks for organisations of all shapes and sizes, IRIS ensures customers can look forward with certainty and confidence.

One in six of the UK’s workforce is paid by IRIS payroll offerings, and globally, six million employees receive their payslip via IRIS software every month. IRIS handles $18 billion of payroll payments annually in US and Canada. Over 12,000 UK schools and academies use IRIS, with four million parents and guardians using IRIS apps to connect with their children’s school; 300 million messages are delivered between schools and parents each year, and over £15 million transactional payments are processed every month. IRIS is certified as a Great Place to Work® in UK, Ireland, India, Canada and USA and recognised as one of The Times Top 50 Employers for Gender Equality in 2023. IRIS is also recognised as one of the Best Workplaces for Wellbeing, one of the Best Workplaces in Tech and one of the Best Workplaces for Women.

To see how IRIS helps organisations get things right first time, every time, visit www.iris.co.uk, www.irisglobal.com or follow IRIS Software Group on LinkedIn, Twitter and Instagram.

About LGPLGP is a leading private equity investment firm founded in 1989 and based in Los Angeles with $70 billion of assets under management. The firm partners with experienced management teams and often with founders to invest in market-leading companies. Since inception, LGP has invested in over 120 companies in the form of traditional buyouts, going-private transactions, recapitalizations, growth equity, and selective public equity and debt positions. The firm primarily focuses on companies providing services, including consumer, healthcare, and business services, as well as retail, distribution and industrials. For more information, please visit www.leonardgreen.com.

About Hg

Hg supports the building of sector-leading enterprises that supply businesses with critical software applications or workflow services, delivering a more automated workplace for their customers.

This industry is characterised by digitisation trends that are in early stages of adoption and are set to transform the workplace for professionals over decades to come. Hg’s support combines deep end-market knowledge with world class operational resources, together providing compelling support to entrepreneurial leaders looking to scale their business – businesses that are well invested, enduring and serve their customers well.

With a vast European network and strong presence across North America, Hg’s 400 employees and $65bn in funds under management support a portfolio of more than 50 businesses, worth over $135 billion aggregate enterprise value, with over 100,000 employees, consistently growing revenues at more than 20% annually. Additional information is available at www.hgcapital.com.

About ICG

ICG provides flexible capital solutions to help companies develop and grow. We are a leading global alternative asset manager with over 30 years’ history, managing $81bn of assets and investing across the capital structure. We operate across four asset classes: Structured and Private Equity, Private Debt, Real Assets, and Credit.

We develop long-term relationships with our business partners to deliver value for shareholders, clients and employees, and use our position of influence to benefit the environment and society. We are committed to being a net zero asset manager across our operations and relevant investments by 2040.

ICG is a member of the FTSE 100 and listed on the London Stock Exchange (ticker symbol: ICP). Further details are available at www.icgam.com. You can follow ICG on LinkedIn, X (Twitter) and Instagram. Past performance is no guarantee of future results.

xxllnc, a leading GovTech software provider in the Netherlands, further expands its market position with the addition of document anonymization player, DataMask.

The combination between xxllnc and DataMask is yet another step for the company to strengthen its position as a complete and innovative player.

– Charly Zwemstra, Managing Partner & Chief Investment Officer at Main Capital Partners

About

DataMask

DataMask, founded in 2019, is a specialist in providing software that supports governments in anonymizing documents to comply with laws and regulations around privacy, compliance and transparency. In addition to the software, DataMask also provides services that support clients in the process of anonymizing documents. DataMask is based in Capelle a/d IJssel.

xxllnc

xxllnc delivers smart scalable apps for the (semi-)government. Applications that support case-oriented working, data integration, taxation, social affairs and spatial planning. To take GovTech to the next level, xxllnc builds an ecosystem where everything works seamlessly together. The perfect combination of applications from the cloud and support from subject matter professionals. Meanwhile, the team consisting of hundreds of specialists is based in Hengelo, Amsterdam, Veenendaal and Eindhoven.

• Indium enables enterprises on their digital transformation journey through a comprehensive suite of services, including Product Engineering, Data Analytics, ML and AI, Low-code No-code, Digital Assurance, and Gaming Tech
• Indium’s blue-chip customer base features multiple Fortune 500 enterprises across various sectors, with a focus on Technology, BFSI and Healthcare industries
• Drawing on its extensive track record in the global Tech Services sector, EQT will support Indium’s management team in strengthening its go-to-market strategy while continuing to build on next-gen offerings across Generative AI and Advanced Analytics

EQT is pleased to announce that the BPEA EQT Mid-Market Growth Fund (“BPEA EQT Mid-Market Growth”) has agreed to acquire a majority stake in Indium Software (the “Company”) from existing shareholders. The Company’s Co-Founder, Ram Sukumar, will continue leading the firm as CEO.

Headquartered in Chennai, Indium is a fast-growing, digital engineering provider, offering cutting-edge technology solutions to enterprise customers and born-digital companies. Indium was co-founded in 1999 by Ram Sukumar and Vijay Balaji, and today boasts of a team of about 3,000 employees. Indium has grown at a CAGR of around 50 percent over the last three years.

BPEA EQT Mid-Market Growth will support Indium in its next phase of growth, drawing on EQT’s global experience in Tech Services with about USD 11 bn invested in the sector in Asia, in-house digitalization capabilities, and global network of industry experts.

Hari Gopalakrishnan, Partner and Co-Head of BPEA EQT India, said, “We are excited to partner with CEO Ram Sukumar and Indium’s stellar management team, as the company enters its next phase of evolution. Indium has highly impressive digital capabilities and a strong client roster of global blue-chip enterprises. We are confident of drawing on EQT’s extensive value creation playbook in Tech Services and supporting the company on its strong growth momentum”.

Ram Sukumar, Co-founder and CEO of Indium, said, “Indium has been built on a culture of client centricity, trust and high-performance. Over the years, we have embraced multiple technology shifts, and today, have become a trusted partner to several enterprises accelerating on their digital and AI journeys. We are truly excited about welcoming EQT as our partner, and we hope to leverage their global footprint to scale our business.”

The transaction is expected to close in Q1 2024

BPEA EQT Mid-Market Growth was advised by JSA, Deloitte, and PwC. Avendus Capital served as exclusive financial advisor and SAM & Co. served as legal counsel to Indium and its shareholders.

Contact
EQT Press Office, press@eqtpartners.com

The information contained herein does not constitute an offer to sell, nor a solicitation of an offer to buy, any security, and may not be used or relied upon in connection with any offer or solicitation. Any offer or solicitation in respect of BPEA EQT Mid-Market Growth will be made only through a confidential private placement memorandum and related documents which will be furnished to qualified investors on a confidential basis in accordance with applicable laws and regulations. The information contained herein is not for publication or distribution to persons in the United States of America. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold without registration thereunder or pursuant to an available exemption therefrom. Any offering of securities to be made in the United States would have to be made by means of an offering document that would be obtainable from the issuer or its agents and would contain detailed information about the issuer of the securities and its management, as well as financial information. The securities may not be offered or sold in the United States absent registration or an exemption from registration.

About EQT
EQT is a purpose-driven global investment organization with EUR 232 billion in total assets under management (EUR 128 billion in fee-generating assets under management), within two business segments – Private Capital and Real Assets. EQT owns portfolio companies and assets in Europe, Asia-Pacific and the Americas and supports them in achieving sustainable growth, operational excellence and market leadership.

More info: www.eqtgroup.com
Follow EQT on LinkedIn, X, YouTube and Instagram

About Indium Software
Indium Software is a fast-growing digital engineering company, focused on building modern solutions across applications, data, and gaming for its clients. With deep expertise in next-generation offerings combining data and applications, Indium offers a wide range of services including Product Engineering, Low-Code development, Data Engineering, AI/ML, Digital Assurance, and end-to-end Gaming Tech.

With about 3,000 associates globally, Indium has built deep relationships with Fortune 500, Global 2000, as well as born-digital companies across industries such as BFSI, Healthcare, Manufacturing, Retail, Digital Native, and Technology companies in North America, India, and APAC.

More info: www.indiumsoftware.com

• HVD Group and Next provide cloud-based software to tradespeople and construction firms in the Nordics, targeting a range of professions including electricians, plumbers and contractors
• The tradespeople and construction industry is one of the largest globally while being one of the least digitized. The modern software solutions offered by HVD Group and Next enable customers to embark on a digitalization journey that improves their efficiency and sustainability
• EQT Private Equity will invest in HVD Group and Next together with the existing HVD Group shareholder Adelis, which will increase its investment

EQT is pleased to announce that the EQT X fund (or “EQT Private Equity”) has agreed to invest in the Nordic software companies HVD Group (Hantverksdata) and Next (Next One Technology). Both companies serve the tradespeople and construction industry, with HVD Group focused on installation and service professions – such as electricians, plumbers, heating and ventilation firms – while Next is focused on contractors. HVD Group’s platform complements that of Next, and the investment therefore paves the way for a further strengthened product offering, which builds on both companies’ strong customer satisfaction scores.

The tradespeople and construction industry is one of the largest globally and yet is still early on its digital transformation journey, which has resulted in low productivity growth over recent decades. HVD Group and Next support the tradespeople and construction workforce to transition from using analogue or complex solutions to instead using their end-to-end software platforms.

HVD Group was founded in Sweden and has over 10,000 customers across the Nordics and Germany. The Company offers cloud-based end-to-end field service management and enterprise resource planning software with key functionalities such as order, project and asset management, scheduling, time reporting, procurement and documentation handling. This enables users to spend less time on administration, while reducing waste and minimizing risk of errors both in the field and the back office.

Next, also founded in Sweden, offers a cloud-based software solution to construction firms and has a strong complementary fit with HVD Group. With approximately 2,500 customers primarily in the Nordics, Next supports contractors, builders and service firms with project management software. Key functionalities include order and resource management, project financials, document handling, checklists and quality control, all of which enable efficient planning, execution and collaboration.

Ali Farahani, Partner within EQT Private Equity’s Advisory Team, said: “Investing in HVD Group and Next creates a strong Northern European platform with leading tech and product capabilities. We have followed the space for several years and are excited to back what is in our mind the most attractive platforms in one of the largest verticals globally. We are extremely impressed by the respective teams led by Mikael and Johan, and we look forward to bringing EQT Private Equity’s software experience to support the organizations through the next phase of continued high growth.”

HVD Group Chairperson Anders Böös and Adelis Partner Joel Russ added: “As long-term investors in HVD Group, we’ve seen the company go from strength-to-strength and it’s clear they have no intention of slowing down. We also know that the tradespeople software sector is robust and attractive given the size and growth, supported by many companies yet having to embrace the benefits from digitalization. That’s why we’re delighted to be moving forward on the journey together with EQT, HVD Group and Next.”

HVD Group CEO Mikael Viotti said: “We’ve made significant investments in our modern product and technology over the recent years, which has been well-received by our customers, and the opportunity to join forces with Next will only strengthen what we can offer to our customers. We look forward to partnering with EQT Private Equity and Next, while continuing to work with Adelis.”

Johan Jarskog, CEO of Next, also commented: “Next and HVD Group have an exciting and complementary fit. Not only from a product perspective, but also in terms of the culture and people, having followed Mikael and his team over the recent years. We are also confident that a combined offering will continue to drive our already high customer satisfaction, as we together with HVD Group will be able to offer an even more comprehensive product to our end users.”

Both transactions are expected to close in February 2024. EQT was advised by Vinge and Adelis was advised by White & Case. Next previous owner Monterro was advised by Houlihan Lokey.

With these transactions, EQT X is expected to be 30 – 35 percent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication) based on target fund size.

The information contained herein does not constitute an offer to sell, nor a solicitation of an offer to buy, any security, and may not be used or relied upon in connection with any offer or solicitation. Any offer or solicitation in respect of EQT X will be made only through a confidential private placement memorandum and related documents which will be furnished to qualified investors on a confidential basis in accordance with applicable laws and regulations. The information contained herein is not for publication or distribution to persons in the United States of America. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold without registration thereunder or pursuant to an available exemption therefrom. Any offering of securities to be made in the United States would have to be made by means of an offering document that would be obtainable from the issuer or its agents and would contain detailed information about the issuer of the securities and its management, as well as financial information. The securities may not be offered or sold in the United States absent registration or an exemption from registration.

Contact
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334

About EQT
EQT is a purpose-driven global investment organization with EUR 232 billion in total assets under management (EUR 128 billion in fee-generating assets under management), within two business segments – Private Capital and Real Assets. EQT owns portfolio companies and assets in Europe, Asia-Pacific and the Americas and supports them in achieving sustainable growth, operational excellence and market leadership.

More info: www.eqtgroup.com
Follow EQT on LinkedIn, X, YouTube and Instagram

About HVD Group 
HVD Group has 300+ employees, SEK 500+ million in revenues and 50+ years of experience providing software to tradespeople within installation, services and construction. The company has presence in Sweden, Finland, Norway, Denmark and Germany, offering a market leading cloud-based and modular system. HVD Group’s solutions and systems are developed by tradespeople for tradespeople. www.hvdgroup.com

About Next One Technology
Next One Technology is a leading provider of business and project management systems tailored for construction firms. Next has 2,500+ customers and SEK 200+ million of revenues. Next integrates all aspects of construction management into a unified platform that provides real time control of projects from early stages to finish. Next has 130+ employees and serves customers primarily in the Nordics. www.next-tech.co

Main has acquired a majority stake in Epona, a leading provider of DMS and CRM software for the LegalTech market.

Investing in Epona aligns with Main Capital’s commitment to fostering innovation and addressing the unique challenges within the LegalTech sector.

– Sjoerd Aarts, Partner and Head of Benelux at Main Capital Partners

Epona

Epona is a leading LegalTech software company that provides comprehensive document management system (DMS) and CRM solutions to approximately 300 law firms and 120 corporate legal departments on an international scale. Notable for its integration with Microsoft Office 365, SharePoint, and Teams, Epona offers a suite of features including document and email management, collaboration tools, matter intake, contract management and workflow automation. The company in headquartered in the Netherlands with additional offices in the US and Portugal.