Tenzing sells FMP to Hg's Iris in maiden exit

Tenzing generated a money multiple of 5.4x and an IRR of 72% on its maiden exit. Tenzing invested in FMP on a deal-by-deal basis with support from Access Capital Partners.

During Tenzing's three-year holding period, FMP expanded its product range, developed a larger international presence, grew profits on average 28% a year and expanded its headcount by 50%, according to a statement.

Iris is making its largest acquisition yet to expand its footprint in the US and other international markets, as well as in the UK.

Previously a portfolio company of Hg 6, Iris Software is now owned by Hg Saturn Fund, which closed on £1.5bn in October 2018. The company is also backed by Intermediate Capital Group's ICG Europe Fund VII, which writes equity tickets of €60-600m.

The group has secured an increment to its term loan from Credit Suisse with an expectation that pro-forma for the acquisition leverage will remain in line with leverage at closing of the 2018 LBO by Hg and ICG.

The acquisition is expected to close at the end of September 2019.

Previous funding
In 2016, Tenzing backed FMP's management to acquire a majority stake in the company for an enterprise value of £29.4m, including £2m debt. HSBC supported the transaction via debt funding.

During Tenzing's holding period, the company made three acquisitions: the customer contract book of domestic payroll bureau PKF Cooper Parry, MCN Associates and a North American payroll bureau.

Company
FMP develops proprietary treasury software for employees and employers in 135 countries. The company was founded in 2016 when Tenzing merged Bond Payroll Services, Bond HR & Payroll Software and FMP Global. The company is based in Gatwick and employs 80 people, according to LinkedIn.

People
Tenzing – Christian Hamilton (managing partner).
Iris Software – Kevin Dady (CEO).
FMP Global – Justin Cottrell (founder, CEO).

Advisers
Vendor – Baird (corporate finance); PwC (financial due diligence); Osborne Clarke (legal).

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