HgCapital has today announced the sale of Computer Software Holdings Limited (CSH) to Advanced Computer Software plc (ACS) for an enterprise value of £110m.

HgCapital acquired CSH as part of its purchase of Iris Software Group in 2011 and has now succeeded in separating CSH out from Iris and selling it on to a strategic buyer. CSH is a leading provider of software to the UK legal and not-for-profit markets and has an increasingly strong offering in accounting software for SMEs, ticketing, software modernisation, and compliance. The company has 16 offices in the UK, 9,000 customers and c.700 employees across the group.

HgCapital has been instrumental in supporting management to establish CSH as a strong, independent company, and to drive long-term revenue and profit improvement.  The management team has focused on the growth of high quality, subscription revenues from CSH’s hosted product offering as customers seek to move their applications online. As a result, CSH has seen a strong increase in orders, client satisfaction and retention rates leading to a higher quality revenue base and improved margins.

With the sale of CSH, HgCapital has again demonstrated its ability to generate value for its clients and build great businesses in the targeted sub-sector of niche application software. The sale of CSH is HgCapital’s third successful exit in the TMT sector in the last three years. It follows the highly successful realisations of Nordic SME software provider Visma in 2010 and the sale of SiTel in 2011. Together with the sale of Addison software in 2008, these four post-Lehman realisations have averaged 3.0x cost and an IRR of 37%. These business have grown in value by c.£970m, over 3,000 jobs have been created while HgCapital has returned £482m to clients.

Jonathan Boyes, Director in HgCapital’s TMT Team who led the sale, commented:

“CSH has made significant progress under HgCapital’s ownership and in ACS has found the ideal home to further develop its market leading suite of products. The successful sale of CSH is further evidence of the success of our focused TMT investment strategy and our ability to work with strong management teams to build great businesses. We remain very confident in the long term outlook for the sector and our ability to create value through our dedicated sector expertise. We wish CSH every success in the future.”

Neal Roberts, CEO of CSH, said:

“HgCapital’s deep knowledge of the sector, operational insight and focused approach combined with their significant support of the management team to help us identify and deliver on growth opportunities was instrumental to our success. This has been an extremely positive relationship and I am pleased to be handing over the reins of CSH to such a strong company in ACS.”