Ebix, the insurance software provider based out of Atlanta, GA has accepted to a US$20 per share buyout offer from Goldman Sachs. The acquisition includes assumed debt and the whole transaction value is at US$820 million.
The offer includes an 18% premium to the share prices of Ebiz prior to the merger announcement. This is just 7.5% premium over Ebix share values at the close of Tuesday's trading. This is where the issue lies, as this is 10% below the enterprise value of the company a year ago. It is for this reason that shareholder derivative suits are in the offing questioning the sale.
Another complication is the merger deal's 'go-shop' provision that allows Ebix to seek better bids from third parties within a forty five day period. Investors are hoping that Goldman either increases its bid or allow it to be beaten by another bidder.
In a statement, Sumit Rajpal, a managing director at New York-based Goldman Sachs said, "We have great respect for Ebix and its strong commitment to providing customers with the highest quality of software and e-commerce services in the insurance industry. We look forward to working with the company and helping it maximize its growth potential."
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