Sydney, June 18, 2007 AEST (ABN Newswire) - IBA Health Limited (ASX: IBA) - Australia's largest listed eHealth company, today announced that CSC Computer Sciences Limited (CSC) has consented in writing to the change of control of iSOFT Group plc (LSE: IOT) (iSOFT) that would result from the merger of IBA and iSOFT.
CSC's consent satisfies a key condition of IBA's offer for iSOFT and clears the way for the merger of IBA and iSOFT to proceed, with the only material remaining condition being the approval of the merger by iSOFT shareholders on 6 July 2008. iSOFT's board continues to unanimously recommend that iSOFT shareholders approve the merger.
CSC's consent follows agreement between iSOFT and CSC to mutually beneficial changes to the terms of the National Programme for IT ("NPfIT") contracts under which iSOFT is providing inter alia, its LORENZO, iPM and ilE healthcare IT solutions to CSC.
The contractual amendments which will facilitate a closer working relationship between iSOFT and CSC are:-
- iSOFT and CSC teams working on NPfIT will be integrated under CSC's leadership, with iSOFT remaining responsible for the employment of the iSOFT development team. This new structure will streamline the development and support of LORENZO, ensuring all parties' interests are aligned.
- In addition to LORENZO, CSC will take responsibility for the codestreams of iPM and iIE for the NPfIT. The provision and support of these products by iSOFT for other customers will be unaffected.
- Approximately two thirds of CSC's licence payments to iSOFT will be guaranteed through calendar based payments, with the remainder based on achievement of mutually agreed milestones. This will provide greater revenue certainty as payments to iSOFT had previously been linked to the achievement of delivery milestones.
- Overall, the total value of the contract to iSOFT will be approximately 5 per cent lower, mainly after 2010, whilst enhancing and securing the revenues for 2008, 2009 and 2010. This is accompanied by a lower risk profile, the removal of delay deductions and a small decrease in operating costs.
- iSOFT will retain the rights to the LORENZO intellectual property, including the rights to exploit it outside the CSC clusters. LORENZO installations (current and planned) outside these clusters will be unaffected and iSOFT does not anticipate that the contract amendments will impact its core long term strategy of developing LORENZO as its strategic product to be sold internationally.
"This agreement is a great outcome for both iSOFT and CSC," said Mr Gary Cohen, executive chairman of IBA. "For iSOFT, it reduces the risk of the programme and strengthens its financial position in the early years of the programme.
"Assuming iSOFT shareholders approve the merger on 6 July, the combined group will become one of the largest healthcare IT providers globally, with an experienced management team and a strong financial position. The merger is expected to increase IBA's earnings per share significantly for the year to 30 June 2008 , before amortisation of acquisition related intangibles, and will open up opportunities to open up new markets and improve margins through economies of scale.
"The new agreement between iSOFT and CSC, assuming the merger proceeds, will provide further strength to the combined group and enable IBA, iSOFT and CSC to work closely together to deliver a high quality solution that meets the NPfIT's objectives.
"Both IBA shareholders and iSOFT shareholders are likely to benefit from the growth opportunities that are expected to result from the merger."
Further details of the agreement between iSOFT and CSC are included in the attached iSOFT release.
ABN AMRO Rothschild, which has underwritten IBA's conditional placement and rights issue in connection with IBA's offer for iSOFT, has advised IBA that on the basis CSC's consent has been obtained following lodgement of the supplementary prospectus, it does not intend to exercise its right to terminate the underwriting agreement in respect of that matter.
Acceptances and full payment for the new shares to be issued under the rights issue must be received by Tuesday, 26 June 2007.
If you have not yet applied for New Shares but would still like to do so, you may do so by completing the Entitlement and Acceptance Form that accompanied the Original Prospectus in accordance with the instructions set out in that form, and returning it, together with your cheque or bank draft in Australian currency (drawn on an Australian branch of a financial institution), in the reply paid envelope.
Overseas Eligible Shareholders will need to affix appropriate postage if sent by mail or hand delivery to IBA's Share Registry at the following address:-
Mail to
Computershare Investor Services Pty Limited
GPO Box 253
Sydney NSW 2001
AUSTRALIA
Hand deliver to
Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
AUSTRALIA
so that it is received no later than 5.00pm Sydney time on Tuesday 26 June 2007.
End of release
Contact
Gary Cohen
Chairman
IBA Health Limited
Phone: +61 2 8251 6700
Email: gary.cohen@ibahealth.com
Media
Greg King
Communications and Business Development Director
IBA Health Limited
Phone: +61 413 621 111
Email: greg.king@ibahealth.com
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