Dr Foster Intelligence has been bought by an Australian telecoms giant, HSJ can exclusively reveal.

The health informatics company, which was formed through a joint venture with the Department of Health in 2006, has been acquired by Telstra Health, a provider of electronic health solutions which is a division of the Australian telecoms company, Telstra.

Dr Foster co-founder, Roger Taylor, said the acquisition would give it “global reach”.

Roger Taylor

The acquisition will give Dr Foster ‘global reach’, Roger Taylor said

The price Telstra paid for Dr Foster is undisclosed, but HSJ understands the Department of Health has broken even on the initial £12m investment it paid for a 50 per cent share of the company in 2006.

The DH took a £4m “capital repayment” from the company in 2010.

HSJ understands the DH’s has recouped its remaining £8m investment, with part of the money coming from the price paid for the business and the remainder covered by cash that was sitting in Dr Foster at the point of sale.

According to Dr Foster Intelligence’s last audited accounts, at December 2013 the company had £5.3m in cash.

Some of this will have been retained by the buyer as working capital, but the rest has been split between the DH and Dr Foster’s other shareholders.

The acquisition builds on an existing partnership between the companies, with Telstra holding exclusive rights to provide Dr Foster’s products in Australia since December 2013.

Shane Solomon, Telstra Health’s management director said the company was “delighted” to acquire Dr Foster.

“We have had a successful relationship as the exclusive reseller of Dr Foster in Australia and when the opportunity arose to purchase the company we saw it as a logical next step, acquiring not only a leading and innovative business but also the experience and skills that will help us compete on the global stage.”

Dr Foster is a wholly owned subsidiary of Telstra but remains a UK business registered at Companies House.

The brand will remain unchanged and there will be no redundancies, with staff continuing as Dr Foster employees and not being absorbed into the larger company.

However, Tim Baker the chief executive of Dr Foster, has finished at the company today by “mutual agreement”.

He will be replaced by Adrian Nowitzke, Telstra’s head of health informatics and a practicing surgeon, who has taken over as Dr Foster’s managing director.

Roger Taylor, Dr Foster’s co-founder and director of research and public affairs, will stay with the company but will move from being an employee to working on a “consultancy basis”.

Telstra was owned by the Australian government but fully privatised in 2007.

The company received a “cash injection” when it recently sold its copper network to the Australian government.

Dr Nowitzke told HSJ the company had decided to invest the money in building an electronic healthcare business because of the “social good elements”.

He said Telstra wanted to expand Dr Foster’s UK business and the acquisition was “as much about improving healthcare in the UK as it is in Australia”.

He said Dr Foster would “be at its best if it’s allowed to keep boxing on” while “reaching in and using the support of the parent company,” including its analytics, IT and back office.

Mr Taylor said Telstra’s “global reach” would allow Dr Foster to “promote ourselves around the world”.

He said that because of the abolition of Primary Care Trusts the health informatics market had been in decline, but with Telstra’s support he was “optimistic that’s going to change”.

Dr Nowitzke added: “We’re confident in the UK market – we’ll be investing so that we grow revenue here in the UK.”