The board of troubled NHS supplier iSoft has made a shock decision to recommend a takeover offer by German firm Compugroup – less than a fortnight after shareholders voted to sell out to Australian software firm IBA.
Compugroup has made a cash offer worth £160m – substantially more than the £140m offer from IBA approved earlier this month.
The move adds another twist in the saga of iSoft, 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 five regions where CSC is the lead contractor.
John Weston, chair and acting chief executive of iSoft, said: "Compugroup's offer represents, in the view of the board, superior value for iSoft shareholders compared with the offer by IBA.
“It underlines the fundamental value inherent in the business, and the strengthening position which the management team has brought over the last year.”
Crisis-hit iSoft has been seeking a buyer since last year, when it reported a string of losses and was hit by a Financial Services Authority investigation into accounting irregularities.
But the sale to IBA was agreed by iSoft shareholders earlier this month after a protracted dispute between iSoft and CSC.
The NHS lead contractor had initially blocked 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.
But after iSoft threatened legal action against CSC – and NHS Connecting for Health, which runs NPfIT, intervened to bring the two sides together – CSC and its subcontractor hammered out new contractual arrangements aimed at ensuring the delivery of the care records system.
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