The takeover saga involving troubled healthcare software developer iSoft took a further turn as German vendor CompuGroup launched an unexpected bid, valuing the target at 160m pounds ($329m).
The move comes just days after iSoft shareholders approved an offer from Australia’s IBA Health worth around 140m pounds ($288m). However, that deal now looks dead as iSoft’s directors have withdrawn their recommendation of the IBA offer and shifted their allegiance to CompuGroup. John Weston, chairman and CEO of iSoft, said CompuGroup’s offer represented superior value for iSoft shareholders compared with the offer by IBA.
iSoft is now set to terminate all agreements with IBA and will pay an inducement fee of 1.4m pounds ($2.9m) to the Australian company. In response to the shock news, IBA said it was considering its options and would make a further announcement in due course.
iSoft’s biggest customer, IT services giant CSC, has given its consent to the CompuGroup takeover. Should the acquisition go ahead, CompuGroup has agreed to sell on to CSC the rights to use and develop iSoft’s Lorenzo software, which is being used by CSC on the UK National Health Services’ IT upgrade project. CSC will pay iSoft an undisclosed sum to complete the deal, following which the Lorenzo NHS products will become the sole responsibility of CSC.
CompuGroup’s major business lines include providing medical information systems, communication services, workflow applications and web-based patient records. The company listed on the Frankfurt stock exchange in May and reported revenue of 140.1m euros ($193.8m) in 2006, up 21% on the previous year.