IRESS is looking to develop and consolidate its UK foothold after entering the market in November 2011. It said Avelo was a "natural fit" for the firm and that there was "huge scope" for new products and services.
The acquisition will see IRESS take 100 per cent ownership of Avelo from a group of private investors led by Lloyds Development Capital (LDC).
LDC took a controlling stake in Avelo in 2009 and supported it through the acquisition of N4 Solutions and TrigoldCrystal.
Simon Badley, chief executive of Avelo, said: "After a long and supportive relationship with LDC, becoming part of the IRESS family is an extremely exciting prospect for Avelo, its people, and our clients.
"Our shared financial services pedigree and priority for customer service will mean confident delivery and smooth transition for our clients in the short term, and with IRESS' product capability and experience extending our services in time."
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Andrew Walsh, chief executive of IRESS, said: "IRESS' acquisition of Avelo is not simply a financial investment but a strategic commitment to long term sustainable growth in the UK and regionally.
"IRESS and Avelo have an unrivalled product suite and scaled delivery capability. This unique combination makes us an obvious choice for manufacturers, distributors and lenders seeking a reliable and financially secure strategic technology partner."
The acquisition is subject to approval by the Financial Conduct Authority.

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