Takeover deal abandoned after concerns raised over removal of competition

A proposed takeover involving a Manchester tech company has been abandoned after concerns were raised by the Competition and Markets Authority (CMA).

Isosec, based on Trafford Park, Stretford, specialises in authentication and identity management for the NHS and had been targeted by US IT security company Imprivata.

However, the CMA announced on April 29, 2021 that the proposed deal would be referred for a further in-depth investigation unless both parties offered “acceptable undertakings” to address the concerns.

Following this announcement, Imprivata has decided to terminate the deal, meaning the CMA has decided not to refer the merger for an in-depth investigation.

Imprivata and Isosec provide secure authentication management solutions to healthcare providers in England.

These technologies can give staff protected access to sensitive patient data sourced from a central NHS IT system.

In its initial Phase 1 investigation earlier this year, the CMA found evidence indicating that Imprivata and Isosec are important rivals in this area and that part of the motivation for the takeover was the removal of a competitive threat from the market.

Competition between these companies was also expected to grow in the future with the introduction of new products.

The CMA was concerned that, if the merger went ahead as planned, it would have an impact on NHS and other healthcare providers across England and could, potentially, lead to taxpayers receiving poorer value for money in relation to these services.

In addition, the companies’ customers, including the NHS, would have limited other options in terms of suppliers.