Ebix and Affiliate of Goldman Sachs Agree to Terminate Merger Agreement
ATLANTA, June 19, 2013 (GLOBE NEWSWIRE) -- Ebix, Inc. (Nasdaq:EBIX), a leading
international supplier of On-Demand software and E-commerce services to the
insurance industry, announced today that it and an affiliate of Goldman, Sachs
& Co. ("Goldman Sachs") have agreed to terminate their previously announced
merger agreement. The merger agreement, announced on May 1, 2013, had provided
for Ebix to be acquired by an affiliate of Goldman Sachs.
The decision to terminate the merger agreement was the result of a letter
received by the Company on June 14, 2013 from the U.S. Attorney for the
Northern District of Georgia that it had opened an investigation into
allegations of intentional misconduct that had been brought to its attention
from the pending shareholder class action lawsuits against the Company's
directors and officers, the media and other sources. The pending shareholder
class action lawsuits and an SEC investigation involving the same subject
matters as these lawsuits were previously disclosed by the Company in its
periodic reports filed with the SEC. The Company has been informed by the
office of the U.S. Attorney that their investigation is in its preliminary
stages and that it is too early to make a determination of whether any
violation of the securities laws or other laws has occurred, or whether any
individual or entity could be considered a target, subject or witness in the
investigation.The merger agreement is being terminated without payment of a
termination fee by either party and each party and certain significant
shareholders of the Company and each of their respective affiliates have
agreed to release each other from all claims arising under or related to the
terminated merger agreement and related transaction agreements.
"We believe the allegations in the class action suits are without merit," said
Robin Raina, Chairman and Chief Executive Officer of Ebix. "We want to thank
Goldman Sachs for their interest in acquiring Ebix and we are naturally
disappointed that we could not complete a transaction at this time. The
Company remains focused on running its business and continuing to provide its
customers with the high quality products and services on which they rely. The
Company's balance sheet remains strong and we believe the Company is well
positioned for future growth and success."
Mr. Pavan Bhalla, Chairman of the Special Committee of the Board of Directors,
said, "We are committed to fully cooperate with all the regulatory
authorities, as they conduct their investigations and believe that the
allegations in the class action lawsuits, which we have understood to form the
basis of these investigations are without any merit.We look forward to what
we expect will be a favorable resolution of these matters.We are committed to
the highest standards of integrity in our business and have confidence in the
ability of the Ebix management team to lead the Company forward."
The Company Board of Directors also announced that it intends to continue to
evaluate strategic options for the Company.
On May 10, 2013, the Company announced results for the first quarter of
2013.Total first quarter 2013 revenue was $52.6 million, an increase of 20%
on a year-over-year basis, as compared to first quarter 2012 revenue of $43.8
Diluted earnings per share ("EPS") for the first quarter 2013 rose 13%
year-over-year to $0.45, as compared to $0.40 in the first quarter of 2012.
For purposes of the first quarter 2013 EPS calculation, there was an average
of 38.8 million diluted shares outstanding during the quarter, as compared to
39.5 million diluted shares outstanding in first quarter 2012.
Ebix continues to have highly diversified revenue streams across thousands of
clients, with the largest client accounting for only 2.5% of the Company's
first quarter 2013 revenues.
About Ebix, Inc.
A leading international supplier of On-Demand software and E-commerce services
to the insurance industry, Ebix, Inc., (Nasdaq:EBIX) provides end-to-end
solutions ranging from infrastructure exchanges, carrier systems, agency
systems and BPO services to custom software development for all entities
involved in the insurance industry.
With 30+ offices across Brazil, Singapore, Australia, the US, New Zealand,
India and Canada, Ebix powers multiple exchanges across the world in the field
of life, annuity, health and property& casualty insurance while conducting in
excess of $100 billion in insurance premiums on its platforms. Through its
various SaaS-based software platforms, Ebix employs hundreds of insurance and
technology professionals to provide products, support and consultancy to
thousands of customers on six continents. For more information, visit the
Company's website at www.ebix.com
We have made forward-looking statements within the meaning of Section27A of
the Securities Act of 1933, as amended, and Section21E of the Securities
Exchange Act of 1934, as amended, in this press release, including, without
limitation, statements regarding the outcome of the governmental
investigations of the Company. The words "believes," "anticipates," "plans,"
"expects," "intends," "estimates," "seeks," "may" and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
that could cause our actual results, performance and achievements, to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements.
Although we presently believe that the plans, expectations and results
expressed in or suggested by the forward-looking statements are reasonable,
all forward-looking statements are inherently subjective, uncertain and
subject to change, as they involve substantial risks and uncertainties beyond
our control, including, without limitation, the risk of an unfavorable outcome
of the governmental investigations or shareholder class action
lawsuits,reputational harm caused by such investigations and lawsuits and the
termination of the merger agreement, as well as the other risks and
uncertainties discussed in our reports and other public filings with the
SEC.This list of risks and uncertainties, however, is only a summary of some
of the most important factors and is not intended to be exhaustive.New
factors emerge from time to time, and it is not possible for us to predict the
nature, or assess the potential impact, of each new factor on our business.
Given these uncertainties, we caution you not to place undue reliance on these
forward-looking statements. We undertake no obligation to update or revise any
of our forward-looking statements for events or circumstances that arise after
the statement is made, except as otherwise may be required by law. Additional
information regarding risk factors that may affect us or these forward-looking
statements is included under the caption "Risk Factors" in our Annual Report
on Form 10-K for the fiscal year ended December31, 2012 and subsequent
filings with the SEC.
CONTACT: Ebix Investors
Steven Barlow, 678-281-2043 or
Aaron Tikkoo, 678-281-2027 or
Andy Brimmer / Tim Lynch / Andrew Siegel
Joele Frank, Wilkinson Brimmer Katcher
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