iSoft sale terms agreed
Published: 16 May 2007 18:28 BST
iSoft, the troubled software supplier at the heart of the NHS's National Programme for IT, has agreed the terms of its sale.
Australian healthcare firm IBA is understood to be paying in the region of £140m for iSoft. The two companies have a history together: Torex — the software firm which merged with iSoft in 2003 — used to be IBA's distributor in the UK. When Torex and iSoft mooted a merger in 2003, IBA complained to the Office of Fair Trading (OFT), but the OFT subsequently gave the merger the green light. iSoft currently also has a presence in the Australian market.
iSoft's Lorenzo software is at the heart of the National Programme for IT (NPfIT), the multi-billion-pound upgrade programme which is the largest civilian IT project in the world. Delays in the delivery of Lorenzo have contributed to considerable criticism of NPfIT, while iSoft itself has been the subject of financial probes and was blamed for the departure of Accenture from NPfIT.
John Weston, currently the acting chief executive at iSoft, will become deputy chairman of the enlarged group, while Bill Henry, currently iSoft's chief operating officer, will become the group's joint managing director alongside Steve Garrington, IBA's current chief executive. Henry will have overall responsibility for the development of Lorenzo and the group's position within NPfIT.
iSoft's shareholders will receive 1.1 IBA shares for each iSoft share they own, and IBA is raising new equity on the back of the deal. The possibility of a takeover of iSoft has been apparent for months, and has played a part in revitalising the company's share price — valued in the terms of the IBA deal at 58.1p per share.
"We believe that this offer from IBA and the associated refinancing of the combined business's balance sheet will enable continuity on NPfIT on a sound footing and will establish a platform for growing the business in the future," said Weston on Tuesday. "It is also a recognition of the considerable progress we have made as a company since the middle of 2006."
A source close to the situation told ZDNet UK that IBA would have had iSoft in its sights due to the company's presence beyond the UK, as well as Lorenzo itself. "The attraction of iSoft is its customer base, with a strong presence in the Australian and emerging Far East markets, including Singapore, and a broad technology portfolio," the source said.
Connecting for Health, the NHS department in charge of NPfIT, refused to comment on the news.
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