On the day of its annual general meeting, troubled healthcare software provider iSoft Group Plc has revealed that it is in talks with a number of potential buyers.
The Manchester, UK-based company said it had received expressions of interest from a number of parties interested in acquiring iSoft, taking a large shareholding in iSoft or creating a strategic alliance with the company. iSoft added that this interest had come from both investment groups and organizations focused on the healthcare market.
iSoft’s share price has collapsed since the start of the year, as serious problems with the company’s work on the UK National Health Service Connecting for Health project came to light. iSoft’s shares are currently trading at just over 50 pence on the London stock exchange, having been valued at approximately 400 pence in January. The company also released terrible results for its most recent fiscal year, making a net loss of 382.2m pounds ($714.7m) on sales of 201.7m pounds ($377.2m).
According to chairman John Weston, iSoft has taken far-reaching action to reduce its cost base. However, the company has forecast a fall in sales for the year to April 2007 of between 10% and 15% and Weston admitted that he did not expect a return to revenue growth until fiscal 2008 at the earliest.
In August, iSoft secured new financing deals with its banks to support its business. Weston said that, while these arrangements had enabled iSoft to continue operating, the cost of those facilities will become progressively more onerous through 2007. He said that, as a result, iSoft was looking at long-term funding and strategic options, including a possible sale.
One potential suitor for iSoft could be IT services vendor Computer Sciences Corp, which last month took over the two Connecting for Health contracts previously run by Accenture Ltd. CSC is now running three of the five regional clusters that make up the project, with iSoft acting as its software subcontractor. In August, as part of a restructuring of the deal between the two companies, iSoft gave CSC the right to assume control of the software development team should iSoft fail to fulfill its obligations.