IBA Health — the largest ASX listed IT healthcare company — has offered to buy iSOFT under a scheme of arrangement, and will refinance iSOFT’s debt of $358 million.
Johnson Winter & Slattery is advising Allco Equity Partners (AEP) on the debt and equity financing it is providing to IBA Health. This includes Allco subscribing for up to $300 million in shares and convertible notes in IBA, giving it a 38 per cent stake in the company, and contributing $62 million towards the refinancing of iSOFT’s debt.
Baker & McKenzie partners Steven Glanz and David Holland and UK law firm Macfarlanes are advising IBA Health.
This is IBA Health’s second offer for iSOFT, after an initial bid based on a one-for-one offer of IBA Health shares for iSOFT shares failed when German company CompuGROUP made an all cash offer to purchase the company.
“Should IBA Health’s offer for iSOFT be successful AEP will be a significant cornerstone shareholder in IBA Health which will have an implied market capitalisation of around $800 million,” said JWS partner Damian Reichel.
“This style of investment well suits AEP’s investment mandate, which includes taking strategic stakes in listed companies.”
As well as Reichel, the partners working on the deal were: Jim Hunwick, Karina Marcar and Christine Ecob.
CompuGROUP had offered 66 pence per share, but with the extra funds via Allco, IBA offered 69 pence per share.
iSOFT’s board had proposed the UK Panel on Takeovers and Mergers hold an auction to determine who would be the winner of the two bidders, but after IBA made its offer, and CompuGROUP said it would not increase its bid, iSOFT’s board recommend shareholders accept the IBA bid.
On 30 August, IBA executive chairman Gary Cohen said in a statement: “Our advisory teams are already implementing the necessary procedural steps to bring this acquisition to a close.
“The merits of this transaction have been strongly endorsed by our shareholders over the last week during a difficult period. I look forward to providing the market with further details and an outline of the timetable shortly.”
UK-based Bird & Bird advised Allco Equity Partners on the UK aspects of the transaction.
iSOFT Group is one of Europe’s largest specialist healthcare software companies, and has delivered healthcare information systems to 1,800 hospitals and more than 6,200 family doctors.