Two investment firms are this weekend vying to buy a stake in Iris, a major provider of software to GP surgeries across Britain, in what is likely to rank as the industry's biggest ever UK takeover.
A deal, which will value the software provider at more than £1.2bn, is likely to be signed in the next few days.
It will almost certainly involve a controlling stake in Iris sold by current owner Hg Capital from its existing fund to its new Saturn vehicle, which was set up to acquire stakes in large technology companies.
Either Omers or ICG will invest alongside Hg's Saturn fund amid what insiders say are prospects for further strong growth in revenues and profits.
Sources said the deal would be one of the four largest software sector buyouts in Europe.
The auction is being handled by Arma Partners, a technology and media-focused investment bank, and has attracted interest from a range of financial and industrial buyers.
Iris specialises in providing accounting and payroll software to private sector clients which include the Royal Opera House and Bellway Homes.
It has seen revenues and profits surge over the last decade.
Hg has held a stake in Iris for 14 years, seeing the company through a string of takeover deals which have netted it several windfalls.
The payday from selling Iris out of its existing fund will be by far its largest to date, having reinvested in the Berkshire-based company in 2011.
One source said a deal worth close to £1.3bn would return up to four times its investors' original outlay.
Iris was expected to be an attractive takeover target because it enjoys profit margins of close to 50%, excluding investments the company has made in a new cloud-based software division.
More than 80% of its revenues are generated by subscriptions, meaning that it also benefits from predictable and recurring cashflows.
Hg is a long-term investor in the software industry, participating last year in a £4.2bn takeover of Visma, a Norwegian software company - the largest such transaction involving the firm.
The London-based buyout firm has enjoyed a string of successes investing in Software (IOB: 0NJS.IL - news) -as-a-Service (SaaS) companies, which have witnessed strong demand as technology becomes embedded in an increasingly broad array of sectors.
While it has traditionally focused on so-called mid-cap companies, Hg's chief executive, Nic Humphries, has identified an opportunity to invest in larger technology-based businesses.
Hg declined to comment this weekend.