Leonard Green to buy Iris Software stake at £3.2B value

Buyout firm Leonard Green & Partners agreed to buy a stake in Iris Software from Hg in a deal that values the company at about £3.15 billion ($4 billion), marking a rare private equity deal in the tech sector.

Leonard Green will become a co-controlling shareholder of the U.K. firm alongside Hg, which is reinvesting in the business, according to a statement Saturday. Terms weren't disclosed. Iris supplies software for the U.K. accounting, payroll, human resources and education sectors. 

Dealmaking in technology has been hampered this year as investors face the squeeze from higher interest rates. Still, this month has been marked by a frenzy of last-minute mergers and acquisitions as dealmakers rush to clinch transactions to end the year on a high after months of disappointing volumes.

Bloomberg News reported this week that the two sides were close to a deal. Arma Partners and Rothschild & Co. advised Hg, while Jefferies International and William Blair acted as financial advisers to Los Angeles-based Leonard Green.

The investment by Leonard Green will help support Iris's expansion into North America, which now accounts for more than 25% of the company's revenue, the firms said.

Buyout firm Hg first invested in Iris in 2004, according to the statement. London-based private equity firm Intermediate Capital Group Plc will remain a minority investor in Iris.