Troubled UK National Health Service (NHS) software supplier iSoft has agreed terms of a sale for around £140 million (NZ$378 million) to Australian software firm IBA.
Most of New Zealand's district health boards are iSoft users.
The sale follows financial scandals that hit the company last year and led to delays in delivery of its Lorenzo care record software, a key component of the NHS's £12.4 billion National Programme for IT (NPfIT).
IBA first revealed it was interested in acquiring iSoft earlier this year. Ironically, iSoft partner Torex — which is also currently mired in financial scandal after an expensive, two-year acquisition spree — used to be a distributor for IBA in the UK before the two firms merged in 2003. At the time, a UK Office of Fair Trading investigation instigated as a result of a complaint brought by IBA against the merger was rejected, allowing it to go ahead.
Meanwhile, iSoft is still under investigation by the Financial Services Authority and the Accountancy Investigation and Disciplinary Board as result of discrepancies revealed last year in its accounting practices, which led to it posting a £14.6 million loss.
Last month, New Zealand electronic health records developer I-health announced it was suing iSoft for breach of contract and breach of the Fair Trading Act.
I-Health alleges iSoft breached a sale agreement by substantially ceasing development of the HealthViews software it bought from I-Health in early 2004. It also alleges the iSoft group failed to market the software worldwide and to license it at market price, instead selling it for substantially less than the list price.
Additional reporting by David Watson