IT services giant CSC has agreed to acquire troubled healthcare software firm iSoft after the latter suspended shares and put itself up for sale last week.
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Experts say the acquisition was necessary for CSC to preserve its contracts with the NHS, which are under intense scrutiny after continued delays.
The Department of Health (DH) recently said it was considering scrapping its contract with CSC to implement iSoft's Lorenzo Care Records Service for the NHS.
The DH has formally notified CSC that it has breached its contract by missing a key milestone and is considering whether to terminate the contract.
According to TechMarketView analyst Anthony Miller, CSC has been investing heavily in its NHS contracts but has so far failed to see a return on investment. "I don't understand how CSC can make a viable financial proposition," he said.
But CSC chief executive Michael Laphen said the acquisition was a critical step in the expansion of its global healthcare business.
"The combination of these companies will further establish CSC as an innovative leader in global healthcare IT," he said.
iSoft's 3,300 employees from India, Spain, UK, Australia, New Zealand and Central Europe, will join CSC.