iSOFT sells assets for $28.5m debt reduction

iSOFT sells assets for $28.5m debt reduction

Health IT company iSOFT (ASX:ISF) has sold some assets it considers to be non-core to cover a $28.5 million debt reduction.

The company revealed it has divested its financial management software business, iSOFT Business Solutions (iBS), and in a smaller transaction its GP administration software Monet.

iSOFT CEO Andrea Fiumicelli said that while iBS was a profitable unit, it was determined after a strategic review to be non-core to the company's operations.

“Its key products, Oracle's e-business suite and Integra financial accounting solutions, have little overlap with iSOFT's proprietary core patient-focused healthcare IT business,” he said.

The iBS unit, which primarily serves public and private sector customers in the UK and Ireland, generated revenue of £17.7 million ($28.2 million) and ebitda of £5.8 million in FY10.

The cash equivalent value of the sale is £23.1 million.

As a result of the repayments, iSOFT will reduce its debt bridge facility from $64.5 million to $37.4 million.

iSOFT has also previously revealed plans to achieve $50 million worth of cost reductions by the end of the financial year. The company reported a swing to a $381.9 million net loss in FY10, mainly as a result of impairment charges.

ISF shares grew 1.25% to $0.081 following the announcement.

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Tags Mergers and acquisitionssoftwareiSOFTdebtASX:ISFAndrea Fiumicelli

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