Earlier this week,
The Goldman Sachs Group Inc.
) agreed to buyout Atlanta-based
), an insurance software provider. The cash deal is valued at
$820 million, including the outstanding debt of Ebix to be taken
over by Goldman.
As per the terms of the agreement, shareholders of Ebix will be
paid $20 per share in cash by Goldman. This amounts to a 7.5%
premium to the closing price of Ebix's shares on Apr 30, 2013.
The deal has received the nod from Ebix's board of directors and
awaits shareholders' approval, following which it is expected to
close in the third quarter of 2013. After this, Ebix will
transform into a private company and its shares will not be
Notably, the company's Chief Executive Officer - Robin Raina and
Rennes Fondation own 19% of the outstanding common shares of Ebix
and have agreed to favor the deal. Moreover, both will remain
investors in Ebix.
Further, as per the "go-shop" provision contained in the merger
agreement, Ebix may implore other strategic alternatives from
third parties in the upcoming 45 calendar days. Therefore, Ebix's
special committee is working to find other potential acquisition
proposals during this period.
Morgan Stanley & Co. LLC, a subsidiary of
) served as the financial advisor to Ebix. Additionally,
Credit Suisse AG
) acted as one of the financial advisors for Goldman.
Ebix is a software and e-Commerce services provider to the
insurance and financial industries. Products provided by the
company include data exchanges, agency systems, carrier systems
and custom software development.
The company has been countering allegations from short-sellers
who accused Ebix of furnishing inaccurate financial statements.
Though the company denied such accusations, yet its stock price
has gone down 37% since the first charge was levied against it in
Goldman, however, is extremely confident regarding Ebix and
believes that the company had no involvement in such
malpractices. Therefore, Goldman is contended with the deal and
is hopeful of taking Ebix to new heights and maximizing its
CREDIT SUISSE (CS): Free Stock Analysis
EBIX INC (EBIX): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis
MORGAN STANLEY (MS): Free Stock Analysis
To read this article on Zacks.com click here.