Ebix Expects the Merger to be Immediately
Accretive and Generate 15 cents of Additional Diluted EPS in Year One
ATLANTA, GA – February 8, 2011 – Ebix,
Inc. (NASDAQ: EBIX or the “Company”), a leading international supplier
of On-Demand software and E-commerce services to the insurance industry, today
announced the closing of the merger of Atlanta based A.D.A.M., Inc. (NASDAQ:
ADAM), with a wholly owned subsidiary of Ebix. The completion of the transaction
helps Ebix to further strengthen its Exchange channel in the Health information
and services areas for Employers, Benefit Brokers, Hospitals, Search Engines,
Media, Healthcare Organizations, Brokers and insurance carriers. The acquisition
is expected to be accretive for Ebix shareholders both in the short and long
term.
Under the terms of the merger agreement, ADAM shareholders
will receive, at a fixed exchange ratio, 0.3122 shares of Ebix common stock
for every share of ADAM common stock. In a special shareholder meeting, ADAM
shareholders overwhelmingly supported the merger with 99.4% of the total ADAM
shareholders' votes cast approving the issuance of shares in the merger. As
of the close of trading on February 7, 2011, ADAM's stock no longer trades on
the NASDAQ stock market.
In the aggregate, Ebix will pay approximately $944 thousand
in cash for unexercised options and issue approximately 3,650,914 shares of
Ebix Common Stock pursuant to the merger. This issuance of shares will increase
the combined Ebix diluted share count to approximately 42,068,000 shares of
Ebix Common stock. The Company also reported that no ADAM options or warrants
were left in the business after closing.
The Company also disclosed that –
- ADAM has already paid for all the bank debt, as per terms of the merger
agreement.
- All legal and investment banking fees have already been paid for, pursuant
to the agreement.
- ADAM cash acquired by Ebix after completion was approximately $5.6 million.
Complementary Strengths and Synergies
The merger of Ebix and A.D.A.M. unites two Atlanta based software services
Companies with complementary services in the health information and insurance
services sectors. Key business strengths of the combination include:
- Health information exchange that puts the power of various consumer health
products and over 18,000-search engine optimized assets to work on hospital
websites across the world.
- End-to-end health and employee benefit software services on an SAAS based
On-Demand Platform that integrates all functions ranging from benefit portals,
enrollment, claims adjudication, accounting, broker systems, cobra, hour-glass
banking to the entire back end processing of a health insurance transaction.
- Top rated, proven e-Learning solutions recognized for ease-of-use, flexibility
and scalability.
- A world-class service and support organization benefiting from the best
practices and infrastructure investments of both companies.
- A stronger presence in the health information and insurance markets utilizing
Ebix’s international footprint.
- Cross-selling opportunities to sell each other’s complementary services
to existing clients of the two companies.
- Both companies have strong recurring revenue streams, with the merger creating
a strong combined business with 75% plus recurring revenue streams.
- Both companies are based in Atlanta, which makes the integration exercise
a more efficient and cost synergies even more feasible.
- With all options being paid for, any variable expenses related to such
instruments will not be there in the Combined Company.
- With A.D.A.M. merging into Ebix, substantial cost synergies on account
of public company costs are likely to be achieved.
- Other Cost Synergies on account of seamless tight integration across the
companies are likely to result in the Combined Company adding 15 cents or
more in additional diluted EPS over the next 12 months after closing.
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 tens of billions 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. Ebix’s focus on quality has
enabled it to be awarded Level 5 status of the Carnegie Mellon Software Engineering
Institute’s Capability Maturity Model (CMM). Ebix has also earned ISO
9001:2000 certification for both its development and BPO units in India. For
more information, visit the Company’s website at www.ebix.com
About A.D.A.M., Inc.
A.D.A.M. has been a leading provider of consumer health information and benefits
technology solutions to healthcare organizations, benefits brokers, employers,
consumers, and educational institutions. A.D.A.M. health and benefits solutions
engage consumers to better understand their health, wellness and benefits choices,
and provide the tools to help them make personalized health and benefits decisions,
while helping healthcare organizations and employers reduce the costs of healthcare
and benefits administration. For more information, visit www.adam.com
Information Concerning Forward Looking Statements
In addition to historical information, this release may contain a number
of “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend,
plan, believe, and words and terms of similar substance used in connection with
any discussion of future plans, actions, or events identify forward-looking
statements. Forward-looking statements relating to the proposed merger include,
but are not limited to: statements about the benefits of the proposed merger
involving Ebix and A.D.A.M., including future financial and operating results;
Ebix’s and A.D.A.M.’s plans, objectives, expectations and intentions;
the expected timing of completion of the transaction; and other statements relating
to the merger that are not historical facts. Forward-looking statements involve
estimates, expectations and projections and, as a result, are subject to risks
and uncertainties. There can be no assurance that actual results will not materially
differ from expectations. Important factors could cause actual results to differ
materially from those indicated by such forward-looking statements.Additional
risks and uncertainties are identified in A.D.A.M.’s Form 10-K for the
fiscal year ended December 31, 2009, Ebix’ Form 10-K for the fiscal year
ended December 31, 2009 and each company’s other filings with the SEC
which available at the SEC’s website at www.sec.gov. Forward-looking statements
included in this release speak only as of the date of this release. Neither
Ebix nor A.D.A.M. undertakes any obligation to update its forward-looking statements
to reflect events or circumstances after the date of this release.
Contact:
Neil Van Helden
678-242-2824 or Neil.van.Helden@Ebix.com
Aaron Tikkoo, IR
Ebix, Inc.
678 -281-2027 or atikkoo@ebix.com |
