Ebix Inc. announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Goldman Sachs & Co.
The transaction is valued at around $820 million including the assumption of any outstanding debt. In order to facilitate Ebix’s shift into a private company, Ebix shareholders will receive $20 per share in cash. The figure is 18 percent more than Ebix’ average daily closing price over the last 30 days.
Ebix made a name for itself over the years as an international supplier of on-demand software and e-commerce services to the insurance industry. They provide solutions including infrastructure exchanges, carrier systems, agency systems and BPO services. Ebix also runs AnnuityNet, which functions as an order-entry platform for annuity transactions. AnnuityNet is a major player in the annuity world, facilitating more than 25,000 annuity transactions and representing more than $2 billion in premium.
However, the insurance software company was probed by the Securities and Exchange Commission for its accounting practices in 2012. During that time, Ebix was also fending off lawsuits, including a class action suit in Atlanta.
The Ebix board, which was acting under direction of a special committee made up of independent directors, decided that entering into an agreement with Goldman Sachs would provide the most value to shareholders. The board then unanimously approved the merger agreement and is urging shareholders to do the same.
The merger agreement contains a “go shop” provision that allows Ebix to accept alternative proposals from third parties during the next 45 calendar days on customary terms and conditions of this nature. These proposals will be reviewed by the special committee with the assistance of its advisors.
The transaction is subject to antitrust approval and other closing conditions, and is expected to close in the third quarter of 2013.