CS Group in £500 million merger with Iris

Finance | 1 Jun 2007

Computer Software Group has joined with IRIS Software Group following a £500 million acquisition that was majority funded by Hellman and Friedman (H&F), a global private equity firm. The two companies will now operate under the IRIS Software Group name.

The merger brings together software contracts for 15,000 accountancy firms, 3,970 legal bodies and 295 not-for-profit organisations. The large concentration of clients in the accountancy and legal sectors has led some to question the new company's commitment to charities. However, Martin Leuw, chief executive of IRIS who will become group chief executive, said it is not his intention to neglect any areas of business. "The combination of both businesses creates £100 million of turnover, providing access to significant R&D budget."

Meanwhile, there has been speculation that the merger signifies the first in a series of tactics to create a global non-profit software provider. Links have been made between this acquisition and Blackbaud, of which H&F was said to own 68 per cent. An article published in June conjectured that the private equity firm had purchased a "controlling interest in Blackbaud" with a view to merging it with CS Group, which would enable Blackbaud to compete more effectively in America. H&F strongly denied this, saying it exited its investment in Blackbaud in February 2006.

"Hellman & Friedman's experience in the NFP market means we were able to spot the potential in CS Group's offering. We look forward to working with them to realise dynamic growth for the business in the same way as we did with Blackbaud through our expertise in the sector. As we no longer have an investment in Blackbaud there are no plans for a merger of the two businesses," said Stephen Duckett, managing director of H&F.

Directory: Blackbaud Europe Ltd

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