CSC to buy troubled iSoft Group

CSC is to take over the company, a clinical software subcontractor in the NHS National Programme for IT, after delays and setbacks in iSoft's Lorenzo clinical software package
Written by David Meyer, Contributor on

Computer Sciences Corporation is to buy iSoft Group, the two NHS National Programme for IT suppliers announced on Saturday.

The deal will see CSC Computer Sciences Australia Holdings buy iSoft Group at a rate of AU$0.17 (11p) in cash per share, representing a 227 percent premium on the AU$0.052 that iSoft Group shares commanded at the end of 24 March, when they were last traded. On that date, iSoft Group put itself up for sale.

By buying iSoft Group, CSC will become even more prominent among National Programme for IT (NPfIT) suppliers. However, its future in that capacity is uncertain due to delays in rolling out iSoft's big product, the Lorenzo clinical software package — only three trusts have fully deployed the system.

After failing to meet a deadline in March for installing Lorenzo at the Pennine Acute Hospital Trust, CSC and iSoft have remained unable to extract key payments from the Department of Health (DoH). The DoH is also still refusing to sign a new contract with CSC. A DoH spokeswoman told ZDNet UK on Monday that the department would not comment on the takeover, but it "remains in negotiations" with the companies and is "considering all the options".

A 'great development'

Meanwhile, iSoft chief executive Andrea Fiumicelli said in a statement on Saturday that the combination of iSoft's Electronic Health Record software and services and CSC's global healthcare "delivery capabilities" would "create a very powerful force in the global healthcare market to enhance the provision of integrated care".

"This is a great development for iSoft's employees as they will have the opportunity to continue their important work in healthcare IT while developing their careers across CSC's global business," Fiumicelli said.

CSC chairman, president and chief executive Michael Laphen said in the statement that the deal would "further establish CSC as an innovative leader in global healthcare IT".

iSoft was the subcontractor to key NPfIT suppliers Accenture and CSC. Extended delays in rolling out Lorenzo eventually led to Accenture abandoning most of its £2bn in NPfIT contracts, leaving CSC as iSoft's main partner in the massive health IT project.

However, relations between the two companies were at times stormy — CSC tried to block the 2007 sale of iSoft to the Australian IBA Health Group, and iSoft briefly responded with legal action. IBA did end up buying iSoft in 2007, at which point it renamed itself iSoft Group.

According to the statement, iSoft's board will "unanimously recommend" voting in favour of the CSC takeover.

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