Ebix Inc. (EBIX), a software solutions provider for the insurance sector, Wednesday agreed to be taken private by an affiliate of Goldman Sachs & Co. (GS) for about $820 million, including the assumption of any outstanding debt.
Following the news, Ebix shares gained 9.5 percent in afternoon trade on the Nasdaq.
The terms provide Ebix shareholders with $20.00 per share in cash, representing a premium of about 18 percent over Ebix's average daily closing price over the preceding 30 days.
The move to go private comes after Ebix mulled over potential alternatives. Ebix said the deal provides significant and immediate value to shareholders.
"With our market-leading servicing platforms and talented team of insurance and technology professionals, Ebix will be well-positioned as a private company to continue to execute on our strategic initiatives and pursue growth opportunities around the world," said Ebix Chief Executive Robin Raina.
Ebix said its board has approved the deal and resolved to recommend that its shareholders also support it. CEO Robin Raina and the Rennes Foundation, which together own about 19 percent of the outstanding common shares, have agreed to vote in favor of the deal.
The deal contains a "go-shop" provision under which Ebix may solicit alternative proposals from third parties during the next 45 calendar days.
Morgan Stanley & Co. LLC acted as financial adviser to Ebix, and Alston & Bird LLP and Richards, Layton & Finger, P.A. acted as legal advisers.
Atlanta, Georgia-based Ebix provides software and e-commerce solutions to the insurance industry, with services ranging from infrastructure exchanges, carrier systems, and BPO services. Ebix has over 30 offices across Brazil, Singapore, Australia, the US, New Zealand, India and Canada.
In March, Ebix stock surged after having reported an increase in fourth-quarter profit. The company reported quarterly earnings of $18.7 million or $0.48 per share, up from $17 million or $0.44 per share last year. Revenues jumped 23 percent to $54 million.
Ebix stock is trading at $20.39, up $1.77 or 9.54%, on a volume of 3.4 million shares.
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