This will be made up of 9m euros ($10.8m) in cash, and 470,119 iSoft ordinary shares. A further consideration of 1.8m euros ($2.2m) in cash and up to 1.8m euros ($2.2m) in shares may be payable based on its financial performance in the next six months. iSoft will also assume debts of 3.9m euros ($4.7m).
Novasoft is based in Malaga, Spain, and specializes in the provision of hospital information systems and associated services. In the year ending December 31, it posted an operating profit of 1.6m euros ($1.9m) on revenue of 13.2m euros ($15.9m). The transaction is expected to be complete before the end of October 2005, and is also expected to earnings enhancing in the first full year of ownership.
The combination of iSoft’s international application development credentials and the Novasoft’s local market presence positions us well in the Spanish healthcare economy that is at the start of a significant period of healthcare service reform and associated technology investment, said chief executive Tim Whiston in a statement.
The acquisition comes at a good time for the Manchester, UK-based company, which recently suffered a setback with some of its contracts with the UK NHS. It derives 36% of its revenue from overseas, and it has had its eye on foreign expansion for a while.
The acquisition gives iSoft an important entry to the Spanish market, and Novasoft brings with it a well established installed customer base, and an in-depth knowledge of the local market. In addition, Spain is embarking on a regional procurement phase for healthcare IT, and last week a 118m euro ($142m) tender was announced in the Madrid region.
