Hg agrees sale of Dext to IRIS Software Group

HgCapital Trust PLC

03 December 2024

 

Hg, the Manager of HgCapital Trust plc ("HgT"), today announces that it has agreed the sale of Dext Software Ltd ("Dext"), a leading bookkeeping automation platform provider, to IRIS Software Group ("IRIS"), a leading global provider of accountancy, education management, HR and payroll solutions

The terms of the transaction have not been disclosed and completion is subject to closing conditions.

HgT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

This transaction values HgT's investment in Dext at approximately £32.7 million. This would represent an uplift of £3.6 million (13% or 0.8 pence per share) over the carrying value of £29.1 million in the Net Asset Value ("NAV") of HgT at 30 September 2024.

Note that these figures only relate to HgT's share of Hg's overall investment in Dext.

Based on the 30 September 2024 reported NAV, the pro-forma NAV of HgT is expected to be £2.4 billion (or 523.0 pence per share).  HgT's available liquid resources, which includes the undrawn bank facility of £347 million for future deployment (including all announced transactions and the interim dividend paid in October) are estimated to be £445 million (19% of the pro-forma 30 September 2024 NAV).

IRIS Software Group Announces Intent to Acquire Dext Software Ltd.  

Acquisition to create an integrated, end-to-end solution, advance partner integrations, and drive product innovation for accountants and businesses globally  

London, UK - 3 December 2024: IRIS Software Group ("IRIS"), a leading global provider of accountancy, education management, HR and payroll solutions, today announced a definitive agreement to acquire Dext Software Ltd ("Dext"), a leading bookkeeping automation platform provider. The acquisition will unite two sector-leading cloud-based platforms - Dext's Bookkeeping Automation Platform and IRIS Elements - to deliver a complementary and fully integrated, end-to-end solution for accountants, bookkeepers, and businesses.  
 
On one side of the accounting value chain, IRIS Elements supports accountants and businesses with practice management and compliance functionality, such as accounts production and tax returns. On the other, Dext simplifies bookkeeping and improves productivity by automating routine tasks with AI. Together, both companies will cover the entire end-to-end accountancy workflow, from data entry and processing to compliance, reporting and advisory services.  
 
Currently, many accountants and businesses face "app fatigue" juggling multiple, disconnected tools to get their daily work done. Through integration, IRIS and Dext's cloud platforms will connect seamlessly with a secure single sign-on (SSO) and share data effortlessly back and forth across both platforms. This will, effectively, create a single, end-to-end view of the entire accountancy workflow. By expanding the global digital footprint in countries like the UK, Canada, France and Australia, the acquisition will also support accountants in staying ahead of rapidly evolving global regulatory and compliance requirements.  
 
Commenting on the agreement, Elona Mortimer-Zhika, CEO of IRIS Software Group said, "With today's exciting news, we are bringing together our amazing customers, partners, and employees to drive the future of tech in the accountancy industry. We are doubling down on our promise to build and offer the most compliant cloud solutions that deliver our customers the highest levels of productivity and engagement, giving them back the critical time they need to advise their clients, grow their businesses, and do what they love. Accountancy has been the heartland of IRIS for 46 years; together with Dext we have a shared passion to be the biggest supporters and best champions of accountants, globally." 
 
The transaction will allow IRIS to accelerate Dext's product roadmap, infuse additional capital and enhance its partner integration program, which already connects to over 35 bookkeeping software platforms and over 11,500 banks & financial institutions. Both IRIS and Dext share a general ledger (GL)-agnostic strategy, ensuring their platforms can integrate with a wide array of accounting software and every bookkeeping provider - connecting multiple workflow streams and providing customers with unparalleled freedom of choice. Accountants and bookkeepers will have the flexibility to use their preferred bookkeeping tools while enjoying the benefits of a smooth, cohesive user experience.  
 
Sabby Gill, CEO of Dext added, "Joining forces with IRIS marks an exciting new chapter for Dext. This partnership enables us to accelerate our product innovation, deepen our integration program, and deliver a complete, end-to-end solution to our customers. I look forward to working alongside the IRIS team to unlock new opportunities for our customers and offer our team members expanded opportunities for personal and professional growth."  
 
Upon closing, Sabby Gill will form part of the IRIS Global Executive team. The transaction is subject to customary closing conditions and is expected to be finalised by the end of this calendar year.   

For further details:

Hg

Tom Eckersley                                                                                                                                       [phone]

HgCapital Trust

Laura Dixon and George Crowe                                                                                                         [phone]

Cadarn

Lucy Clark

[e-mail]                                                                                                                    [phone]

Cadarn

David Harris

[e-mail]                                                                                                                  [phone]

About HgCapital Trust plc

HgCapital Trust plc, whose shares are listed on the London Stock Exchange (ticker: HGT.L), gives investors exposure through a liquid vehicle to a portfolio of high-growth private companies in the software and services sector. The selection of new investments and creation of value in these businesses are managed by Hg, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors. For further details, please see www.hgcapitaltrust.com.

The contents of the Hg, HgCapital Trust and IRIS Software Group and Dext Software Ltd websites are not incorporated into, and do not form part of, this announcement.

 

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