IRIS Accountancy Solutions CEO Sion Lewis at Accountex 2018
On the first morning of Accountex last week, IRIS Software Group confirmed that its owner, Hg Saturn Fund, had entered into a joint partnership with Intermediate Capital Group (ICG) in the country’s largest-ever private equity-led software buyout.
The terms of the investment were not revealed, but what has happened is that Hg’s Hg6 fund sold 100% of its holding to a partner fund, Hg Saturn and the new shareholder, ICG.
ICG is listed on the London Stock Exchange (ticker symbol: ICP) and currently manages €28.7bn of assets. ICG describes itself as a specialist asset manager that seeks to pioneer new strategies for increasing shareholder value.
The IRIS transaction has been on the cards for a month or so, ever since Hg let it be known that it was looking for a buyer. The headline target was £1bn, and last week’s announcement put the estimated value of IRIS at £1.3bn.
In the circumstances, it’s difficult for IRIS to avoid the headlines at the moment. While it was receiving an investment infusion from new owners, IRIS simultaneously announced at last week’s trade show that it has acquired Taxfiler.
IRIS Accountancy Solutions CEO Sion Lewis told AccountingWEB that the background financial maneuvering didn’t make his job any easier, but was very clear that Hg is putting the foundations in place to drive the group’s growth forward.
With the core accountancy products beginning to experience disruption from the new cloud generation, it made sense to jump on the bandwagon to get a foothold in the “micro-practice” market among new and small niche firms.
But while Taxfiler will cover off that front, IRIS also has its eyes on a bigger prize. In an Accountex interview with AccountingWEB (see video interview below), Lewis said he is working on a three-prong strategy to cater for larger accountancy practices as well as the smaller ones that currently sandwich the company’s mid-market heartland.
To supplement its new strategy, Lewis is also beginning to talk publicly about “Project Darwin”, a major R&D push to “liberate” the desktop IRIS compliance suite and enable access via a cloud platform. It’s unclear whether this is likely to be along the lines of the TaxCalc Cloud Connect or Sage 50cloud online data store models, or a more open app platform along the lines of CCH OneClick or Xero HQ.
The answer to these questions will be revealed at the IRIS World roadshows in the autumn, Lewis said.
“This is the start of a five-year strategy for IRIS. Our heritage is certainly in accountancy and it will continue to be a major part of our business.”
AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.