CSC to allow iSoft merger with IBA Health

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CSC will allow NHS IT supplier iSoft to go ahead with a merger with Australian firm IBA Health, it was announced today.

CSC - which is iSoft's largest customer - blocked the £140 million bid for the troubled company in May, prompting a legal battle. But following changes to a contract between the NHS' National Programme for IT (NPfIT) and the two firms to develop the Lorenzo software, CSC has said it will allow the merger.

"Our relationship with CSC has clearly been tested in recent weeks, however, this agreement underpins our good working relationship which we look forward to continuing," said iSoft chief executive John Weston, in a statement.

The contract in question is the development of the healthcare information management software Lorenzo for the NPfIT - worth some £300 million to the firms.

The changes will streamline the management structure of the project, ensure intellectual property rights and sets out licensing payments.

CSC will now lead the development team, which will remain in iSoft's employ and retain intellectual rights. CSC will be responsible for programme performance. The firm's licensing payments to iSoft will fall by five per cent and no longer be linked to delivery milestones, but instead mostly calendar based.

"The new management structure will streamline the processes to ensure the delivery to the NHS of a quality product on time," said Weston. "It aligns both management teams with the highest priority of delivering the NPfIT."

The merger still needs to be approved by iSoft shareholders, which is expected to happen at a meeting on 6 July.

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