iSoft and CSC have struck a deal which allows
iSoft to be taken over by IBA.
The pair had been at loggerheads over the acquisition, as CSC
wanted to ensure that iSoft would remain a viable software partner
for its major
NHS National Programme for IT contract.
The two companies have now shelved their legal actions and CSC
has approved the IBA takeover, which will allow loss-making iSoft
to be refinanced.
The takeover could not go ahead without such approval and
iSoft faced bankruptcy in November when its current funding
ended.
The deal sees the development of the iSoft Lorenzo records
software in the NHS contract coming under the leadership of CSC,
although iSoft retains ownership of the software and can still
freely sell it to others.
The software development is currently behind schedule and the
NHS records system has also been delayed as a result.
CSC will also take responsibility for the code streams of
i.Patient Manager (i.PM) and i.Integration Engine (i.IE) for
the National Programme. These are also iSoft products.
The contract licence payments to iSoft have also been modified,
resulting in a 5% reduction overall. The potential value for iSoft
for the duration of the contract is £300m.
John Weston, acting CEO at iSoft, said, “The new management
structure will streamline the processes to ensure the delivery to
the NHS of a quality product on time.
“Our relationship with CSC has clearly been tested in recent
weeks. This deal will enable the iSoft management team to spend
more time on the development of the new products and continuing
improvements to our customer service.
“It also clears the way for the merger with IBA, which provides
long term financial stability,” he said.
Guy Hains, president of CSC's European Group, said, "We are
delighted to have successfully concluded these discussions and
acknowledge the significant contribution made by NHS Connecting for
Health in bringing all parties together to determine a satisfactory
outcome.”
Connecting for Health, the NHS body overseeing the National
Programme, had previously been quoted as wanting to stay out of the
disagreement.
iSoft puts CSC legal action on ice >>
iSoft sues CSC over acquisition stance >>
NHS provider faces bankruptcy after CSC objects to acquisition
>>
CSC vetoes takeover of iSOFT >>
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