Anyone who has followed the ups and downs of healthcare application provider, iSOFT’s turbulent past may well consider it appropriate that news it is to be acquired by CSC was confirmed on April 1.
As avid HotViews readers will remember, the iSOFT business was originally UK-based. It grew rapidly throughout the 1990s on the back of acquisitions – notably of rival Torex – and success under England’s National Programme for IT in the NHS (NPfIT), where it secured three key contracts as a subcontractor to systems integrator CSC. But as delays to the programme mounted, and questions were raised over iSOFT’s finances, the UK business was acquired by a smaller Australian rival with big ambitions, IBA Health, in 2007 (see IBA finally wins iSOFT). IBA rebranded as iSOFT but its dreams soon faded. Delays to the rollout of its Lorenzo software under NPfIT continued and its financial situation worsened. By November last year, iSOFT was up for sale again (see Anyone want to buy iSOFT?).
Now the Australian-headquartered healthcare IT firm looks set to be rescued by its largest customer, CSC, in a c$188m (£117m) bid. At A$0.17 per share in cash, the offer to shareholders is more than three times the last closing price for iSOFT’s shares before they were suspended from the Australian Stock Exchange a week ago (see iSOFT halts share trading). It values iSOFT at around $495m once debt is taken into account and is expected to close by September. The acquisition is via a court-approved scheme of arrangement and it is still subject to iSOFT shareholder approval and certain Australian and EU regulatory approvals.
So, is buying troubled iSOFT a last resort for CSC as it works to keep its NPfIT contracts, which rely on iSOFT’s products, on track? Or is it an opportunistic move that CSC hopes will strengthen its healthcare IT offering, not just in the UK but in other international markets where it holds ambitions? The truth may well be somewhere in between, as TechMarketView Foundation Service subscribers can read on UKHotViewsExtra.