CSC says iSoft deal not in ‘best interests’ of NPfIT

Computer Sciences Corporation, local service provider to three NHS regions, today said that it has refused to back the IBA takeover of iSoft in the ‘best interests’ of the National Programme for IT (NPfIT).

The LSP, which holds contracts for the North, Midlands and East regions, confirmed today that it has vetoed the takeover of iSoft by Australian firm IBA Health.

In a statement CSC said: “CSC is committed to the successful delivery of the NHS National Programme for IT (NPfIT). CSC’s decision not to consent to the proposed change in control of iSoft has been governed solely by what it considers is in the best interests of achieving this goal.”

CSC said that it had been working with iSoft to find a suitable buyer, but discussions with IBA have left them concerned about the impact the sale would have on the work on NPfIT.

“Discussions and correspondence regarding IBA commenced in January, and we have continued in active dialogue with the company up to the present date. During this time, CSC has undertaken due diligence to assess the impact of the IBA transaction on NPfIT.

“Our ongoing discussions and correspondence with iSoft clearly reflected CSC’s concerns and position, resulting in CSC confirming on 28 May, that it does not intend to consent to the IBA transaction.”

They add: “CSC has engaged with iSoft and its banks to explore ways to underpin the long term financial stability of iSoft.”

CSC is currently deploying iSoft’s iPM and iCM systems into trusts in the North, Midlands and East and are working on the Lorenzo solution with iSoft.

Earlier this month, CSC’s president of the Europe Group, Guy Hains, told the Commons Health Select Committee that he was confident that the technology being deployed will bring great benefits to the NHS and that iSoft’s Lorenzo will take the NHS into the next generation.

He added: “There is no doubt that the uncertainty regarding iSoft and its future ownership is an unwelcome distraction, but we are duly supportive to iSoft and Lorenzo, which is why we have sent 100 of our people to work on it and 23 NHS clinical professionals are also working on it. We expect delivery in the middle of next year.”

Approval from CSC is a pre-requisite for the IBA takeover of iSoft proceeding, leaving the £140m takeover in doubt.

Connecting for Health commented: “NHS Connecting for Health’s position in respect of this transaction is that this is a matter for CSC. NHS Connecting for Health has bought services from prime suppliers whose responsibility it is to choose their technology solution. We have had no approach from CSC in connection with this matter.

“If a supplier wishes to change the contract, they will need to negotiate and agree that change with us. When this has happened previously – as with BT and Fujitsu changing their subcontractor – we have protected the taxpayer by maintaining the original terms and conditions of the contract.”

iSoft now has until November to secure investment. Its shares closed 7.75p down yesterday at 43p on the London Stock Exchange.

According to the Guardian newspaper, IBA is considering legal action if CSC continues to ‘unreasonably withhold consent’ to the deal.