CSC has completed its £117m acquisition of Australian health IT firm iSoft Group Ltd.
The deal means that CSC is now the largest supplier of clinical IT systems to English health services. In particular, as a result of the deal, CSC now holds a commanding position in the hospital market.
ISoft is CSC’s main sub-contractor under the £12 billion National Programme for IT in the NHS, for which CSC is the local service provider for the North, Midlands and East.
The company is currently at deadlock on re-negotiating reductions to contracts worth £3 billion to deliver a much delayed new electronic patient records system, Lorenzo.
The acquisition significantly reinforces its position in regards to NPfIT, where its performance has been heavily criticised by the public spending watchdog, the National Audit Office.
In February, the Department of Health said it was considering terminating CSC’s NPfIT contracts after it failed to hit a series of key deadlines to deliver Lorenzo to trusts.
The sale of iSoft was triggered by a 2010 collapse in its share price, resulting from a failure to deliver predicted revenues due to delays in developing Lorenzo.
First announced in April this year, the sale of iSoft to CSC has had to clear legal challenges from former executive chairman Gary Cohen, who stepped down 12 months ago.
Led by Cohen, Australian firm IBA Health bought iSoft in October 2007, a deal that had been triggered by a collapse in iSoft’s UK stock market value.
The CSC acquisition closed just days before the UK House of Commons Public Accounts Committee will publish a report that is also expected to be highly critical of CSC’s NPfIT record.
However, CSC says that the deal will help accelerate the growth of the company’s global healthcare business.
ISoft, which has 3,000 employees globally, has a strong market position in Australia, continental Europe and Asia Pacific, but its core market remains the UK where it is the market leader by installed base.
“The completion of this acquisition is a milestone in the expansion of our global healthcare business,” said Michael Laphen, CSC chairman, president and CEO. “CSC is at the forefront of emerging healthcare technologies, giving our clients access to an expanded range of innovative capabilities.”
Former iSoft CEO Andreas Fiumicelli has been appointed chief operating officer of CSC’s healthcare business.
He said of the deal: “Joining forces with CSC is a major step forward for iSOFT, putting us in a position to accelerate the delivery of our Innovation Agenda.
“By combining both organisations we have created a major force in the healthcare industry with significant opportunities for future growth through richer solutions and much enhanced access to the global market.
"Building on this platform, our ambition is to become one of the world’s leading healthcare IT suppliers.”
CSC says that 13,000 healthcare providers and governments in 40 countries use iSoft’s e-health software solutions.
© 2011 EHealth Media.
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