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A back-office software developer has been bought by its management in a £100 million deal. Computer Software Group was acquired with the backing of European private equity investor HgCapital.

HgCapital will continue to work with the buy-out team to develop the group through supporting its organic and acquisitive growth and by further investing in its technologies.

Computer Software’s chief executive, Vin Murria, said this new partnership will help the group to focus on building a great business. “The management team is passionately committed to developing the business and, in HgCapital, we have secured an investor with long-standing experience of backing business-critical application software companies.

“We are investing in the future of our customers and they can expect continued excellence in service and product development,” he added. “This is just the start of a very exciting new chapter in the history of Computer Software.”

HgCapital has introduced Alex King to the board following the completion of the deal.

“This is a company which has an attractive combination of market leadership across its key business units, together with a very successful track record of growth achieved both organically and from judicious acquisitions,” King said. “We plan to support the management team in continuing to expand the business, whilst at the same time integrating the acquisitions made in the last 24 months.”

HgCapital adds this deal to its previous investments in the software and technology sectors, such as IRIS Software, Addison Software, Rolfe & Nolan and Axiom.

The deal’s sole mandated lead arranger and underwriter of the senior and mezzanine finance was NIBC, led by Andrew Mercer. The firm won the mandate due to the flexibility of the package it provided.

Mercer said this was a very good deal for HgCapital. “Computer Software Group is a highly acquisitive business, having made 13 acquisitions over the past four years. 

“The financing package was built around continuing to provide sufficient financial flexibility for the management team and HgCapital to continue to make a relatively high number of acquisitions within the constraints of a levered financing structure. 

“The innovative debt structure which allows for a significant number and amount of largely debt funded acquisitions to be made,” he added. “This was possible because both the management team already have an excellent track record in making and integrating acquisitions at attractive purchase multiples.”

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