IRIS has revealed its acquisition of financial management software business PS Financials. AcccountingWEB caught up with chief executive Kevin Dady to find out more about its strategic growth plans.
The acquisition will expand the software house's offering into financial software for schools, particularly academy schools. But this sector is not new territory for Dady; about a year before joining IRIS, he worked for a company called Capita, who sold software into the local government and education sector. Businesses there would turn over within the £150m-180m region.
So when IRIS become aware of the PS Financial opportunity six to eight weeks ago, Dady saw the acquisition as having high growth opportunity. Currently, there are 16,000 schools operating under Local Education Authorities spending £900m each year on education.
“With the government currently driving the agenda to increase the rate of conversion of schools to academies, this acquisition represents a significant opportunity for IRIS to help oil the cogs of another critical UK industry,” he said.
Dady also recognised a crossover opportunity with the education sector and what the software company currently does: “We know from some of due diligence we've carried out on the acquisitions that there's a good opportunity to develop further the sale of our payroll and HR products into schools.
“I don't think this will be in the short-term, but in the medium-term we think that is something that we believe has good traction. Therefore that expands further the IRIS portfolio products into a sector where we currently do not have a foothold.”
The opportunity from academies should be familiar to a growing number of accountants approached by these schools to do their accounts. Hearing the call from the IRIS customer base to understand more about the academy and schools market, Dady revealed that there’s “an integration opportunity with PS Financials and IRIS accounting products”.
PS Financial currently provides software to more than 2,900 organisations – focusing on a unified ledger solution but has cornered the education sector, where it has found most success selling cloud-based installations to primary and secondary school academies.
PS Financial will continue to work across its two locations in Peterborough and London. The current management team, headed by PS Financials managing director Richard Pierce, will remain with the company – and Dady indicated that IRIS plans on accelerating recruitment and investment in the business.
Commenting on the purchase Pierce added: “The IRIS team impressed us with its deep understanding of our market and business. The core PS Financials solution has been long recognised as a market leader in the financial management software sector and this move will create a group with unrivalled breadth and depth in its portfolio. We therefore very much look forward to working with IRIS during the next chapter of our growth.”
This acquisition is the latest addition to the software company’s growing portfolio, where Gearshift joined the group in September last year. And IRIS isn’t done yet: Dady teased further activity in the future. “Do not be surprised if you see further investments in the education space in the next 12 months. That said, we are not moving away from our core business, with IRIS being the main provider of accounting and HR software.
Dady added: “The good thing about the education market place is there is always going to students and children. The future of education and schools is an exciting place to be and the ed-tech market is a growth industry.”