iSoft divests in debt reduction move

Troubled health software vendor iSoft has offloaded its financial management business arm to Capita Group in a move aimed at reducing its crippling debt.

iSoft designated its Business Solutions (iBS) unit as non-core in an ongoing strategic review, an evaluation which led to the decision to offload.

The sale is set to loosen iSoft's financial belt buckle at a debt-free/cash-free equivalent value of £23.2 million, or AU$36.6 million.

iSoft's newly appointed chief executive officer (CEO), Andrea Fiumicelli said that the software platforms on which iBS operated didn't stack up against the parent company's business strategy.

"While iBS is a profitable business, its key products, Oracle's e-business suite and Integra financial accounting solutions, have little overlap with iSoft's proprietary core patient-focused healthcare IT business," Fiumicelli said.

"Given this, and our strong desire to reduce debt, the divestment was deemed appropriate," the CEO added.

iSoft is continuing the strategic review of its business after it posted a $383 million loss for financial year ending 30 June 2010.

At the announcement of the results, then CEO Gary Cohen stepped down from his position, appointing Fiumicelli as acting head of the company.

Under the review program, iSoft has undergone several leadership changes including the permanent appointment of Andrea Fiumicelli as CEO from an acting role, and a major debt restructuring deal to bring it back into the black.

iSoft has told investors that 2011 will be a year of transition, and expects to enter 2012 in a stronger financial position.