Buyout rocks Lorenzo's UK health IT program

Buyout rocks Lorenzo's UK health IT program

The future of the Lorenzo care record system at the heart of the U.K. National Health Service's (NHS's) £12.4 billion (US$24.8 billion) National Programme for IT (NPfIT) is up in the air, as rival firms bidding for troubled software supplier iSoft set out different plans.

Last week, iSoft announced that it was discussing an auction with the Takeover Panel, an independent City regulatory body, as two rival bidders are now competing to buy it.

Australian software firm IBA has made a £166 million offer for the NHS supplier, which would also include buying out its debt. An earlier £140 million bid from IBA was first agreed by the iSoft board, then abandoned in a surprise move, after German firm CompuGroup stepped in with a £160 million cash offer.

But the rival bidders have set out different arrangements covering delivery of the Lorenzo system to the NHS. The care records software is the core element of the new NHS computer system in three out of five NPfIT regions where CSC is the lead NHS contractor, but delivery is already running more than two years late.

CompuGroup has made clear its purchase of iSoft would be followed by CSC's acquisition of all iSoft's NPfIT contracts, along with an NHS version of Lorenzo and the existing iSoft NPfIT products, i.Patient Manager and i.Integration Engine.

The complex proposal would mean CompuGroup would also be free to develop its own version of Lorenzo -- and to sell future versions to the NHS -- as well as retaining responsibility for iSoft's NHS legacy products

Documents supporting IBA's latest bid show that if its bid was successful, the iSoft and CSC teams working on NPfIT would be integrated under CSC's leadership -- but ownership would not pass to CSC.

IBA would gain iSoft's rights to the Lorenzo intellectual property, including the rights to exploit it more widely across the NHS. Around two thirds of CSC's licence payments to iSoft would be guaranteed through calendar based payments, with the remainder based on "mutually agreed milestones", the documents say.

Neither IBA nor CompuGroup has yet declared their bid a final offer, opening the door to further twists in the convoluted iSoft saga. Analysts have previously suggested that the critical NHS software has a safer future in the hands of CSC, in line with CompuGroup's proposal.

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