A club of direct lenders is providing a £1.45 billion-equivalent debt package for the refinancing of U.K. software solutions provider Iris Software Group, sources told Reorg.
Blackstone, Goldman Sachs and GIC are expected to lead the financing, two of the sources said. Other lenders in the club include SMBC-Park Square, PSP and Sixth Street, sources said.
The deal was signed earlier today with allocations still being finalized, the sources added.
The deal, denominated in sterling and dollars, comprises a £950 million-equivalent unitranche and a £500 million-equivalent delayed draw term loan, the sources said.
Leonard Green & Partners and Hg secured pricing of 475 bps over the reference rate on the dollar tranche, and 500 bps over the reference rate on the sterling to refinance the debt of Iris Software, sources said.
Negotiations with Leonard Green have been drawn out as the incoming investor pushed to optimize terms for several weeks, sources said, with one noting that the documents have extremely weak lender protections.
Direct lenders including Blackstone’s private credit arm were pitching debt priced at SONIA+550 bps earlier in the year after Leonard Green secured its investment in Iris Software,
as reported. The U.S. private equity firm entered negotiations for the group after Hg’s talks with preferred bidder KKR collapsed just before Christmas.
Iris Software has a £795 million term loan B due in September 2025,
as reported.
The group provides software solutions and services to manage core business operations.
Iris Software was founded 45 years ago and has 100,000 customers across 135 countries in accountancy, education and business.
Hg, Goldman Sachs and Blackstone declined to comment. Leonard Green, GIC, SMBC-Park Square, PSP and Sixth Street did not return requests for comment by the time of publication.