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 U.K. firm at around £3 billion ($3.8 billion), according to the people, who asked not to be identified because the information is private.
Iris supplies software for the accounting, payroll, human resources and education sectors. It is based in the U.K., but has been
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.
KKR is lining up debt financing for the acquisition from direct lending funds, comprising a £1.1 billion unitranche loan with a £350 million 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.
