IRIS signs £450m senior and junior package

Alternative lenders Babson Capital, CVC Credit Partners, EQT Credit and Park Square Capital all joined the refinancing and dividend recap facility.

HgCapital’s IRIS has signed an almost £450 million ($700 million; €616 million) refinancing and dividend recap deal with a group of lenders. The package for the business software provider is split between a senior piece that is just shy of £300 million, a £75 million second lien line and a £75 million payment-in-kind (PIK) facility, sources told PDI

The new deal will replace the technology firm’s older credit lines as well as finance a dividend for its private equity sponsor, HgCapital. The six-year senior term loan comprises a £250 million drawn line, a £30 million undrawn acquisition facility and a revolving credit facility of just more than £10 million. 

The senior piece pays a margin of 450bps, the sources said, adding that the £75 million second line piece pays an 800bps margin while the interest on the PIK piece is 12 percent. 

The slightly longer-dated second lien and PIK lines were provided by EQT Credit, Park Square Capital and CVC Credit Partners, which joined on a smaller ticket than the other two anchor lenders. 

A group of 11 lenders, mainly banks, provided the senior piece though non-bank lender Babson Capital also committed to the senior facility. 

Lenders contacted by PDI declined to comment on the deal. 

HgCapital first acquired a stake in IRIS in 2004 before selling off most of its holding in 2007 following the company’s merger with Computer Software Holdings (CSH). The merged firms were sold to Hellman & Friedman for £500 million. In 2011, HgCapital became the largest shareholder in IRIS again when CSH was spun-out and sold on. 

UK-based IRIS provides business software solutions with a subscription revenue base.