Accountancy software company Iris has been sold as part of the formation of a new £500m IT group.

Iris , which recently announced it was up for sale after months of speculation about its future, has been sold by owners Hg Capital to Hellman & Friedman.

H&F has created an enlarged business by merging Iris with another UK company, Computer Software Group.

The group, which cost H&F £500m, has combined revenues of £100m and will operate under the Iris Software Group brand. Iris chief executive Martin Leuw will be the group chief executive of the enlarged business.

Computer Software Group is strong in the law profession.

Hg Capital will remain a 'significant shareholder' in the group.

'It is excellent news for our customers as it significantly expands our R &D capabilities and service infrastructure as well as providing tremendous scope for career opportunities for our employees,' said Leuw.

He led a £102m MBO of Iris with funding from Hg Capital in July 2004.

The group would not reveal how much H&F has paid for Iris, although industry insiders had previously suggested Iris was up for sale at about £250m.

Further reading:

Iris goes up for sale