The bidding war for iSoft intensified last night after Australia’s IBA Health re-entered the fray increasing its offer to £166m topping a rival offer from Germany’s CompuGroup.
IBA tabled a £140m all share offer earlier this year, which was bettered in July by a £160m all cash offer from CompuGroup, backed by the iSoft Board. Compugroup’s approach came after an earlier all-share offer from IBA.
IBA also revealed it had substantially strengthened its hand by reaching agreement to acquire 24 per cent of iSoft’s shares.
ISoft said today that its board "will consider the revised IBA offer and will respond in due course". An iSoft spokesperson told E-Health Insider: "The board needs to convene and decide what the response to this is."
The smaller Australian health IT firm, which has a turnover of only £24m, is reported to have strengthened its offer for iSoft after a deal with Allco Equity Partners, an Australian private equity house, to provide up to £122m to finance the deal.
IBA says that the combined group would be better able to complete the development of iSoft’s next generation Lorenzo software, would then form the enlarged firm’s flagship product.
Gary Cohen, IBA’s chairman, said he was confident about winning the support of CSC Corporation, the US prime contractor responsible for delivering much of the NHS multi-billion IT programme. ISoft is CSC’s main software sub-contractor under the NHS IT programme, responsible for delivering new IT systems to three-fifths of the English NHS.
Cohen said in a statement: "This merger of two leading healthcare IT companies will create one of the largest providers of health IT solutions in the regions from Europe through to Australasia."
The American company previously exercised its contractual vetoe to block the original proposal for IBA to buy iSoft but subsequently withdrew its opposition.
Under the terms of July’s proposed CompuGroup deal, the German firm said upon completion of the deal it would sell CSC the software assets required to deliver its commitments under the NHS IT programme.