KKR Emerges as Frontrunner for £3bn Iris Software Acquisition

KKR & Co. is in advanced talks on a potential acquisition of Iris Software, in what would rank as the year’s biggest buyout of a private European software company, people with knowledge of the matter said.

The investment firm has pulled ahead of other bidders and is negotiating final terms of an agreement with Iris’ private equity owner Hg, the people said. A deal could value the UK firm at around £3bn, according to the people, who asked not to be identified because the information is private.

Iris supplies software for the UK accounting, payroll, human resources and education sectors. The transaction would mark a rare private equity buyout in the tech sector, which has been battered this year as investors face the squeeze from higher rates.

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KKR is lining up debt financing for the acquisition from direct lending funds, comprising a £1.1bn unitranche loan with a £350m delayed draw term loan on top of that, the people said. Pricing on the unitranche loan is expected to be about 575 basis points over the Sterling Overnight Index Average, or Sonia, the people said.

There’s no certainty the talks will lead to an agreement, and another buyer could still emerge. Representatives for KKR, Hg and Iris declined to comment.

Source: Yahoo! Finance

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