IBA chief exec says iSoft remains target

Gary Cohen, chief executive of Australia’s IBA Health, has backed recent restructuring at iSoft as the company continues takeover talks with the British medical software developer at the heart of the £12.4bn NHS IT programme.

In an interview with The Australian newspaper, Cohen said that although restricted in what he could say by British takeover rules he confirmed that IBA remained in the running to acquire iSoft, and that discussions had been underway since late last year.

"One thing I can say quite positively, which has been said to the market and is public knowledge, is that John Weston[iSoft chairman] and his team have made progress in management and in addressing the issues that caused the problem in the first place," Cohen said.

"iSoft publicly put itself up for sale in October 2006 and you had to apply to become part of the process to ensure that you were taken into account in any consideration," Cohen confirmed.

IBA emerged as a bidder for troubled iSoft on 16 February following reports that discussions on a £200m (AU$485m) deal between iSoft and purported front runner, US-based McKesson, had stalled.

"IBA’s position is not new. IBA has been in the process with the board of iSoft under the position iSoft announced since October," The Australian reported Cohen as saying.

"I can’t tell you anything about what impact it’s going to have on IBA until we make an announcement about whether we have made an arrangement with iSoft," Cohen said. He further declined to comment on how many other suitors for iSoft were also in the running.

He added: "We are strongly of the view that iSoft is a continuation of our existing international growth strategy and what we would be doing in that would be totally consistent with that strategy."

Cohen’s reported comments came as IBA announced results for the six months to December 31 that included an increase in revenue from AU$21.5 million a year ago to AU$36.3 million.

IBA also lifted its full-year revenue and earnings forecasts and said it expected 2007 earnings to hit £13.3m $32m, up from £7.9m AU$18.95m in 2006. It said revenue would improve from £24.5 AU$59m at the end of the 2006 financial year to £31.25m AU$75m.