By S Shyamala Apr 01 2011 , Chennai Tags: CSC, iSoft., Companies
Global software major CSC has agreed to buy e-health services company iSoft. The latter Securities Exchange (ASX) communicated to its employees worldwide that its board has unanimously recommended the sale.
'Following an announcement by CSC today that it has entered into an agreement to acquire iSOFT, I would like to inform you of the process leading up to this proposal and what happens next,'reads an email sent to employees by iSoft's chief executive officer Andrea Fiumicelli on Friday. 'The proposal from CSC arises from the strategic review initiated at the end of the 2010 fiscal year, which was aimed at reducing group indebtedness and maximising the value for existing shareholders. The review also investigated recapitalisation proposals and asset sales. The proposed acquisition will be implemented via what is called a scheme of arrangement in Australia. There are a number of conditions that have to be satisfied, such as EU merger clearance, before the proposal can be put to shareholders to approve. As a consequence it may be several months before there is any significant new information I can share with you.' The proposed acquisition provides for the repayment of all iSOFT senior bank facilities and convertible notes, while enabling iSOFT shareholders to realise cash for their iSOFT shares at a significant premium to recent trading levels, the mail further said. Rumours were rife on Friday that the proposed consideration for the deal is about $300 million.
Earlier on March 24, iSoft requested ASX to temporarily suspend trading of its securities 'pending an announcement regarding an update on the company's strategic review process. 'Further, 'the directors consider that the current status of the strategic review process and the proposal received as part of this process including relating to a potential change of control are not significantly advanced to permit the disclosure of complete information to the market, the announcement said. Given the nature of the proposals received, in the absence of a detailed announcement there is potential for trading to take place in a speculation or uninformed market. Accordingly, the company requests a voluntary suspension of its securities to prevent trading taking place in a speculative or uninformed market ahead of the announcement, it added.
The company expects it will be in a position to make an announcement on this matter in the next week and requested that the voluntary suspension remain in place until the commencement of trading on Monday, April 4.
iSoft totally has about 4,600 employees across 18 locations worldwide. Over 1,500 employees are said to be working in India spread across Chennai and Bangalore.
