IBA Health seals iSoft deal

IBA's long battle to take control ends

It's been a long year for IBA Health executive chairman Gary Cohen.

Cohen last week announced the Sydney-based health technology company's A$410 million (NZ$494 million) acquisition of struggling British rival iSoft had finally been completed.

IBA's bid to acquire iSoft has stretched out throughout most of this year, as the listed Australian company fought to win the approval of key private and public-sector stakeholders, including regulators, as well as beating a rival bid from Germany's CompuGroup.

"I think we're all pretty tired, but thoroughly pleased that we've got to the finishing line," Cohen told The Australian Financial Review from Londonlast week. "We'll have a few drinks tonight."

Cohen certainly has a reason to celebrate: the combined entity will form the largest listed Australian technology company, with a market capitalisation of more than A$1 billion.

Allco Equity Partners provided A$237 million funding to support the investment and has emerged with a potential 30.6% cornerstone stake in IBA if it converts all its convertible notes.

Australian IT companies of such a size are rare, with most local entrepreneurs selling the companies they founded to larger international rivals or private equity.

Cohen, who will be the combined company's chief executive officer, now faces the arduous task of integrating iSoft's far-flung operations.

IBA has 3500 staff in 35 countries, and about 13,000 global customers. It has a bigger software development presence in low-cost location India than any Australian company except Australia and New Zealand Banking Group.

One particular pain spot will be iSoft's involvement in the United Kingdom's A$29 billion technology refresh project at the country's National Health Service.

Cohen, who has just completed a global tour of iSoft's operations, will spend his immediate future in the UK steering IBA's involvement in the project and integrating iSoft's UK operations.

Most of iSOFT's senior management, including chairman and acting chief executive John Weston, will leave the company with the merger complete. Cohen said the exodus was mutually agreed.

There are no immediate plans to appoint new European management for IBA, as Cohen is remaining in the region for a while. Former IBA CEO Steve Garrington will take responsibility for Asia, the Middle East and Africa.

iSoft's current local managing director, Nigel Lutton, will step up to control IBA's entire Australia and New Zealand division. IBA's headquarters will stay in Sydney.

— Copyright: Australian Financial Review

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