Computer Software Holdings CSH acquired by Advanced Computer Software

Advanced Computer Software acquired the entire share capital of Computer Software Holdings from HgCapital in March 2013, at an enterprise value of £100–350M in cash. The transaction was a carve-out: HgCapital had bought the business in 2011 as part of its purchase of Iris Software Group, then separated it before selling it on. Computer Software Holdings develops software for law firms and charities. Its legal products handle the matters a practice is working on, the time its solicitors record against each, the bills that follow and the client account rules the profession imposes, where money held on behalf of clients must be reconciled daily and is audited annually. Its charity products handle donations, grants and the reporting those organisations owe their regulators. It also sold accounting software to smaller businesses, ticketing systems and tools for modernising older applications. It operated from 16 offices across the United Kingdom, served 9,000 customers and employed around 700 people, generating revenue of £50–100M and an EBITDA of £5–25M, an EBITDA margin of [members only]. Under HgCapital, management had shifted the business towards hosted products sold by subscription, as customers moved their systems online. That change raises the quality of the revenue: a licence sold once becomes a payment received every year, and the provider holds the data rather than the client, which makes departure harder. For HgCapital, the sale was its third exit in technology, media and telecoms within three years, after the Nordic software company Visma in 2010 and SiTel in 2011. Together with Addison in 2008, those four disposals had returned three times cost at an internal rate of return of 37%.