(Bloomberg) -- Bain Capital has agreed to sell UK payroll software company Zellis Group, whose clients include department store Harrods and carmaker Jaguar, to Apax Partners, according to a statement.

The deal values Zellis at about £1.25 billion ($1.56 billion), according to people familiar with the matter. Apax is partly funding the deal with a unitranche loan of £450 million from private credit funds, the people said, asking not to be identified discussing confidential information. 

“After the great Covid resignation, companies across the board are doubling down on limiting employee churn and enhancing employee engagement and transaction,” said Christophe Jacobs van Merlen, a partner at Bain Capital, said in an interview. “We think payroll tech will continue to be an attractive space.”

Representatives of Bain and Apax declined to comment on the valuation.

Bain acquired the business in 2017. Since then, Zellis Group has accelerated its growth including through the purchase of a benefits administration software platform, Benefex, in 2018. 

The firm serves about one third of the companies in the FTSE 100, with its payroll software used to pay or reward about 5 million individuals each month. Zellis is headquartered in Bristol, England, with operations in the UK, Ireland, India and the Philippines. 

Zellis and Bain Capital were advised by Evercore and Morgan Stanley. Apax was advised by Arma Partners and Citigroup Inc.

The environment in private equity deal making is improving, especially for “high-quality assets,” Jacobs van Merlen said. 

“There is a bifurcation in the market with bidders leaning forward into high-quality assets, and others proving harder to transact,” he said. “It’s much easier in this market to finance assets, which is also why we are seeing more transactions launching. There’s a big backlog of assets to come.”

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