iSoft agrees to CompuGroup''s acquisition

24 July 2007

An unexpected turn of events on Friday, July 20, undid Australian IBA Health Ltd.''s nearly complete takeover of the struggling healthcare software company iSoft Group plc, as iSoft agreed to a £160 million ($328.2 million) offer from Germany''s CompuGroup Holding AG.

CompuGroup has offered 66 pence (US$1.35; €0.98) a share in cash, a premium of nearly 19 per cent to the current value of IBA''s offer. CompuGroup CEO Frank Gotthard cited a strong fit with complementary geographic footprints and significant opportunities to leverage industry know-how and technical expertise as the main benefits of the union.

IBA'' Health''s offer has been agreed in May, and was due for the UK High Court''s approval on July 25. iSoft and IBA Health had gotten their transaction back on track a month ago when US company Computer Sciences Corp. (CSC) agreed to back the deal after initially rejecting it. Based in El Segundo, Calif., CSC subcontracts work to iSoft on the £12 billion Lorenzo patient database being built for the UK''s National Health Service (NHS) and has a the right to veto any change of ownership at iSoft

Prior to any agreement with IBA Health, iSoft was already in intermittent talks with other prospective buyers of the company, including CSC itself. German CompuGroup said CSC backs its offer.

CompuGroup was founded in 1987 by CEO Frank Gotthardt, and had a secondary public offer in Frankfurt in May, during which General Atlantic halved its stake to 16.5 per cent, and the Gotthardt family sold a 20 per cent holding, leaving them with 45 per cent of the company.