iSoft battle rejoined as IBA ups bid to £166m

Troubled NHS suppler iSoft now appears on course to be bought by Australian software firm IBA Health, after it upped its bid today by more than a fifth to try to beat off a rival offer from German firm Compugroup.

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Troubled NHS suppler iSoft now appears on course to be bought by Australian software firm IBA Health, after it upped its bid today by more than a fifth to try to beat off a rival offer from German firm Compugroup.

The increased offer – worth to £166m plus debt – is the latest twist in an increasingly convoluted saga that has seen iSoft seemingly headed for IBA back in July, only for Compugroup to come through with a cash offer worth £160m – substantially more than the £140m original offer from IBA that was first approved by iSoft’s shareholders.

iSoft is the supplier of the Lorenzo care records system at the heart of the NHS’s £12.4bn National Programme for IT (NPfIT) in three out of the five regions into which the programme is divided up. In these regions CSC is the lead contractor and back in May it used a veto power it held under its NHS contract to block the £140m sale of iSoft to IBA because it felt this would not support delivery of Lorenzo, which is already running more than two years late.

CSC will now need to approve IBA’s new offer over Compugroup’s, and some analysts have warned this is not a foregone conclusion.

However, CSC has been working with iSoft since its original veto and last month reached agreement to buy the division of iSoft that is developing the Lorenzo care records system.

Under that agreement, the two companies will integrate their teams working on Lorenzo, under CSC’s leadership. iSoft has pledged to deliver Lorenzo to CSC by early 2008, leaving the way clear for CSC to start rolling it out under the health service computer programme from mid-2008 onwards.

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