iSOFT Group Limited (ASX:ISF) Interview With CEO Gary Cohen On The BridgeForward Acquisition

Sydney, Aug 12, 2009 AEST (ABN Newswire) - iSOFT Group Limited (ASX:ISF) today announced the acquisition of US software developer BridgeForward, whose key product is the Viaduct integration software.

What is your rationale for acquiring BridgeForward?

Executive Chairman & CEO Gary Cohen

BridgeForward provides two major benefits to iSOFT. First it's an important toehold for us in the US market. President Obama has recently signed into law an investment of over US$19 billion to accelerate the adoption of computerised medical records. This is directed towards interoperability of healthcare records between healthcare providers. Our LORENZO Health Studio product, together with the BridgeForward product, is aimed at winning a slice of this new and growing market.

Second, the acquisition is part of our strategy of ensuring we have world-class intellectual property across the entire healthcare continuum. The BridgeForward deal, like our Hatrix acquisition earlier this year, is about strengthening our product offering. In BridgeForward we've acquired an excellent team of developers and a leading-edge technology we can sell as a standalone product or embedded in our own LORENZO next-generation solution.

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Given LORENZO already has a level of interoperability with existing systems, how will Viaduct add value to the LORENZO platform?

Executive Chairman & CEO Gary Cohen

We see significant potential for Viaduct to be embedded with LORENZO, which is not itself an integration engine. Viaduct is a new product and has a service-oriented architecture (SOA), the same state-of-the-art architecture that we developed LORENZO with. The acquisition means we're channelling the R&D dollars we would have invested in building out this capability of LORENZO into a world leading product that's already built.

We also see significant potential for Viaduct as a standalone product. Viaduct is an integration engine, a critical component in electronically connecting healthcare systems. Viaduct provides the interoperability demanded across healthcare systems, allowing disparate legacy systems to interact with each other and share information.

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You've acquired BridgeForward for up to US$14.9 million, including an upfront payment of US$4.9 million and an earn-out of up to US$10 million over five years. What is BridgeForward's earnings history and what is the earn-out based on? What synergy benefits might be generated as a result of the acquisition?

Executive Chairman & CEO Gary Cohen

We have a confidentiality agreement in place and can't disclose the terms of the earn-out. As I mentioned before, the acquisition will enable us to channel our future R& D more effectively in this area, which will lead to savings in our R&D budget. There may also be synergies in our customer support costs:

BridgeForward has over 4,000 existing customers from most of whom it receives support revenue.

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How does the BridgeForward acquisition fit with your strategy in the US market?

Executive Chairman & CEO Gary Cohen

The US market is huge, highly fragmented and privatised. As I've mentioned, Viaduct is a new product designed especially to assist with integration of healthcare organisations. Given the US government's push toward utilising interoperable solutions, the integration of Viaduct with LORENZO Health Studio, which is a development toolkit designed to build applications in the LORENZO framework, will provide a very compelling offering to the US market at this time.

Further, part of our US strategy is to build up expertise and knowledge of the market whilst growing a profitable business. BridgeForward's employees will enable us to achieve that goal.

But the acquisition of BridgeForward isn't solely about our US strategy.

Separately, Viaduct is being used to help consolidate data from some 740 GP systems in Alberta, Canada, and BridgeForward also has significant operations in our core UK market.

Contact

Gary Cohen Executive Chairman & CEO iSOFT Group Limited Tel: +61-2-8251-6700 Email: gary.cohen@isofthealth.com Stuart Kelly Director, Corporate Affairs iSOFT Group Limited Tel: +61-2-8251-6769 Mob: +61-404-082-361 Email: stuart.kelly@isofthealth.com