NHS IT supplier CSC has refused to back the takeover of iSoft, a firm contracted to build software for millions of electronic health records.
The planned £140m takeover of IT group iSOFT by Australian rival IBA Health would have injected cash into the firm which had suffered financial difficulties in recent years.
Last year iSOFT posted losses of £382 million in August and, without the takeover, is believed to have only enough cash to survive until November this year. It is also under investigation by finance watchdog the FSA.
IBA said iSOFT had received a letter from CSC saying that that it would not consent to a change of control at iSOFT. CSC has a right to veto any takeover of iSOFT as part of its contract with the firm to supply the £6bn National Programme for IT in the NHS.
A spokeswoman for CSC said its decision not to consent to the proposed change in control of iSOFT was in the best interests of achieving the goals of the programme.
“CSC has undertaken due diligence to assess the impact of the IBA transaction on NPfIT. Our ongoing discussions and correspondence with iSOFT clearly reflected CSC's concerns and position, resulting in CSC confirming on 28 May, that it does not intend to consent to the IBA transaction.”
CSC remained supportive of iSOFT’s delivery, she said.
“We currently have around 100 of our own staff fully engaged with iSOFT in this Programme and are planning for this number to increase. In parallel, CSC has engaged with iSOFT and its banks to explore ways to underpin the long term financial stability of iSOFT."
A spokesman for Connecting for Health said, "NHS Connecting for Health's position in respect of this transaction is that this is a matter for CSC.”
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