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McKesson To Acquire British Software Vendor System C

March 3, 2011 News 2 Comments

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McKesson announced Thursday morning in Europe that it will acquire British IT vendor System C Healthcare in a $140 million cash deal. The price represents a 51% premium to System C’s closing price last week before the company announced that it was in takeover discussions.

System C offers the Medway suite used in 40 NHS and private hospitals. It includes electronic medical records, patient management, departmental, business intelligence, and portal applications. Its Liquidlogic subsidiary sells software for social services agencies involved with children, domestic violence, housing, and mental health.

System C was in the news recently when a modified version of Medway was implemented as part of the Whole Hospital Information Systems project of the Ministry of Defence, supporting UK military and NATO personnel in the Camp Bastion hospital in Afghanistan.

The company lost money in the first half of the year after NHS changes affected its revenue.

System C had made a string of its own acquisitions, including IQ Systems Services (software for private treatment centers) in 2007; Care Records Unlimited (clinical systems) in 2008; Bluestar UK Group (healthcare RFID) in 2009; Conscia Enterprise Systems (web portals) in 2009; and Liquidlogic (social services software) in 2009.  

With the NPfIT decision to decentralize its system selection process, NHS trusts are no longer obligated to buy systems from approved vendors iSoft and Cerner. McKesson, whose patient management and administrative systems are run in several UK hospitals, had previously announced plans to localize its Paragon system for use there.

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2 Responses to “McKesson To Acquire British Software Vendor System C”

  1. 1
    zaphod beeblebrox Says:

    Yeah, Paragon was never going to fly over in the UK given the very tough Minimum Data Set requirements and PAS waiting list and statutory reporting requirements that would have had to be developed.

    System C had been doing well particularly after the MoD decision, but in the past year or so, they have struggled like everyone else due to the cutbacks in NHS acute hospital spending overall, the lack of faith in healthcare IT caused by the failures of the NPfIT, and the low priority in investing in IT.

    I am sure this is a sensible medium term move by McK but it follows the same old pattern for them and HBOC before them as far as the UK is concerned. “Let’s acquire more product and market share and that will work”!. At one point McK had 4 different PAS offerings in the UK market place due to different acquisition moves. Not sure how many it is currently, but add plus one more.

    The System C management are solid gusy. Will be interesting to see what there role will be going forward.

  2. 2
    Lazlo Hollyfeld Says:

    Another UK-based health IT company acquired on the cheap especially compared to their US-based counterparts. Yeah there is opportunity there with blowing up the PCTs/Tory reform efforts but seems like alot of outside US-based companies are really overestimating the growth potential here over the next 5 years.

    These M&As have been coming fast and furious although I am frankly more interested in some of the telehealth & community-based IT companies and solutions. NHS is making a real concerted effort to keep people at home mainly because its relatively cheap & they are desperate to squeeze ‘blood from a stone’ to even get close to the those 20% efficiency savings that Cameron and the Tories call for from the NHS over the next few years. Coming soon to the American health care system near you!

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