iSOFT, a key technology provider to the NHS
National Programme for IT, faces bankruptcy after its
NHS contract partner objected to its takeover.
iSOFT partner CSC says it is opposing the
takeover deal with Australia’s IBA, after evaluating the effect
of the acquisition on its existing NHS contracts.
CSC uses iSOFT’s Lorenzo records system for the NHS contracts it
holds for the North Midlands and East (NMEPfIT) regional
cluster.
The IBA takeover was dependant on CSC approval. The acquisition
would have led to loss-making iSoft being refinanced from money
raised by IBA. The collapse of the deal now leaves iSOFT facing
bankruptcy, as its existing credit facilities run out in
November.
Neither iSOFT nor IBA have commented on CSC’s decision. CSC
said, “it is committed to the successful delivery of the NHS
National Programme for IT”, and that its decision to oppose the
takeover is “governed solely by what it considers is in the best
interests of achieving this goal”.
Phil Codling, a principal analyst at Ovum, said, “CSC is not
saying exactly why it is unhappy with the bid from IBA. Its primary
concern will be the prospects for effective delivery of iSOFT's
Lorenzo software, the development of which is literally years
behind schedule already.
“Perhaps CSC is concerned that the amount of debt IBA would need
to take on to finance the purchase would impact development
budgets,” he said.
If iSOFT does go to the wall, CSC may feel it would be in a
better position to develop the software itself, said Codling.
The door may now be open to other parties - including
McKesson and
General Atlantic - that were previously interested in acquiring
iSOFT.
iSoft’s future uncertain
after more losses >>
Troubled NHS software provider up for sale >>
iSOFT reveals £382m loss
>>
iSOFT 'irregularities' to be investigated >>
iSOFT >>
CSC >>
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