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FOR IMMEDIATE RELEASE
LMC Capital LLC Initiated and Advised
Ebix on the following transaction
September 25, 2006 08:30 AM Eastern Time
Ebix Signs Agreement to Acquire Finetre Corporation
Transaction Establishes Ebix as Clear Leader in Annuity
Exchange Market, Bolstering Finetre's Already Unassailable
Position
ATLANTA--(BUSINESS WIRE)--Ebix, Inc. (NASDAQ: EBIX),
a leading international developer and supplier of software
and e-commerce solutions to the insurance industry,
today announced that it has signed anagreement to
acquire Virginia based Finetre Corporation through
a merger effective October 1, 2006. The closing is
expected to occur on October 2, 2006.
Founded in 1997, Finetre Corporation is a Northern
Virginia-based ASP software technology firm focusing
on transaction processing and compliance automation
in the financial services industry. The acquisition
adds a premier annuity exchange, AnnuityNet, which
services approximately $15 billion in annuity premiums
each year over the Internet, to Ebix's already dominant
position as an exchange for life insurance sales illustrations
through its EbixLife subsidiary. The acquisition is
expected to be accretive to Ebix earnings per share
for 2007.
The deal will involve upfront cash payments of $13
million to Finetre shareholders plus a potential earn-out
cash payment of up to $3 million spread over two years
if specific revenue and net income targets of the Finetre
division of Ebix are achieved. Ebix intends to fund
this transaction through a combination of internal
sources and a recently signed $12 million credit line
with LaSalle Bank. No Ebix shares will be issued in
the transaction.
Ebix also announced that in the future it intends to
merge Finetre with its wholly-owned subsidiary EbixLife,
creating a combined entity that will significantly
increase operating efficiency at both companies. The
integration is expected to spark significant additional
growth and aggressive expansion into new product lines
including life insurance transaction processing since
the combined company will benefit from access to Ebix's
extensive development resources and the larger customer
footprint of the combined entity. After the merger
is complete, EbixLife will serve 48 insurers and hundreds
of distributors, providing a complete suite of sales
support, transaction processing and back-office automation
products and services.
In May 2006, July 2004 and February 2004 respectively,
Ebix completed the acquisition of Virginia-based Infinity
Consulting, Melbourne-based Heart Consulting Group
and Utah-based LifeLink Corp. Inc. (now renamed EbixLife)
respectively, adding 15 property and casualty insurance
companies, hundreds of brokers and approximately 35
life insurance companies as customers. All these acquisitions
have been accretive to the Ebix results from the date
of the acquisition.
"Ebix is an acknowledged leader in the insurance automation space and
will provide Finetre with access to the resources and relationships in the
life insurance sector that are needed to take the next great leap forward," said
Steve Dunlap, Finetre senior vice president and chief marketing officer. "They
provide a natural home for Finetre, and we're excited that our current and
future clients will benefit from all that Ebix brings to the table."
Robin Raina, chairman, president and CEO of Ebix, Inc.
said, "The acquisition of Finetre is a logical
next step to our 2004 purchase of EbixLife, formerly
known as Lifelink. EbixLife provided us with a leadership
position in the life insurance sales illustration market
while the acquisition of Finetre will provide us with
a leadership position in the annuity exchange market.
Both of these acquisitions complement each other in
terms of cross-selling and convergence opportunities.
Also the life and annuity markets go hand in hand with
a majority of annuity carriers selling life insurance
products and vice-versa."
Raina added, "In the last few years, Ebix has
successfully established itself as a leading back-office
services provider in the insurance industry. The purchase
of Finetre builds on this strategy of growth through
recurring revenue derived from powering transactions
through an array of specialized e-commerce tools and
services. We believe that the combination of EbixLife
and Finetre has the ability to propel the industry
forward in terms of converging life and annuity illustrations
and transaction processing on a single platform, while
improving Ebix's 2007 earnings."
"We are especially pleased that the acquisition provides us with a cohesive
management team and an employee base that has delivered consistently and brings
specialized annuity expertise to Ebix," added Raina. "We intend to
support the present Finetre management team and enable it to accelerate its
efforts to increase its market presence in the annuity and life insurance exchange
market places."
LMC Capital LLC initiated the transaction and served
as financial advisors to Ebix for the transaction.
About Finetre Corporation
Founded in 1997, Finetre Corporation is a Northern
Virginia-based software technology firm focusing on
transaction processing and compliance automation in
the financial services industry. Finetre's AnnuityNet
Platform currently processes approximately 15,000 annuity
transactions with a total value of nearly $1.5 billion
for more than 20 brokerage firms each month over the
Internet. Finetre has been privately held by investors
including: GE Equity, Lincoln Financial Group, CCP
Equity Partners, The Phoenix Companies, Professional
Direct Agency, Inc. (an affiliate of Wachovia), Ohio
National Financial Services, FBR Financial Services
Partners, and Sun Life Financial. For more information,
visit the Company's website at www.finetre.com
About Ebix
Ebix, Inc. is a leading international supplier of software
and e-commerce solutions to the insurance industry.
Ebix provides a series of application software products
for the insurance industry ranging from carrier systems,
agency systems and exchanges to custom software development
for all entities involved in the insurance and financial
services industries.
Ebix strives to work collaboratively with clients to
develop innovative technology strategies and solutions
that address specific business challenges. Ebix combines
the newest technologies with its capabilities in consulting,
systems design and integration, IT and business process
outsourcing, applications software, and Web and application
hosting to meet the individual needs of organizations.
With bases in Singapore, Australia, the US, New Zealand,
India and Canada, Ebix employs insurance and technology
professionals who provide products, support and consultancy
to more than 3,000 customers on six continents. Ebix's
focus on quality has enabled it 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 call center units in India. For more
information, visit the Company's website at www.ebix.com
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release contains various forward-looking
statements and information that are based on Ebix management's
beliefs, as well as assumptions made by and information
currently available to management. Ebix has tried to
identify such forward looking statements by use of
such words as "will," "expects," "intends," "anticipates," "plans," "believes" and
similar expressions, but these words are not the exclusive
means of identifying such statements. Such statements
are subject to various risks, uncertainties and other
factors which could cause actual results to vary materially
from those expressed in, or implied by, the forward
looking statements. Such risks, uncertainties and other
factors include the extent to which the Ebix.com website
and other new products and services can be successfully
developed and marketed, the risks associated with any
future acquisitions, and integrating recently completed
acquisitions, the willingness of independent insurance
agencies to outsource their computer and other processing
needs to third parties, possible governmental regulation
and/or other adverse consequences resulting from negative
perception of the outsourcing of business processes
to foreign countries, Ebix's ability to continue to
develop new products to effectively address market
needs in an industry characterized by rapid technological
change, Ebix's ability to raise additional capital
to finance future acquisitions and meet other funding
needs, Ebix's dependence on a few customers(including
one that is Ebix's largest stockholder), Ebix's dependence
on the insurance industry, the highly competitive and
rapidly changing automation systems market, Ebix's
ability to effectively protect its applications software
and other proprietary information, Ebix's ability to
attract and retain quality management, and software,
technical sales and other personnel, the risks of disruption
of Ebix's Internet connections or internal service
problems, the possible adverse effects of a substantial
increase in volume of traffic on Ebix's website, mainframe
and other servers, possible security breaches on the
Ebix website, the possible effects of insurance regulation
on Ebix, the possible effects of the Securities and
Exchange Commission's investigation of Ebix's financial
reporting, and possible future terrorist attacks or
acts of war. Certain of these, as well as other risks,
uncertainties and other factors, are described in more
detail in Ebix's periodic filings with the Securities
and Exchange Commission, including Ebix's quarterly
report on Form 10-Q for the quarter ended September
30, 2004. Except as expressly required by the federal
securities laws, Ebix undertakes no obligation to update
any such factors or any of the forward-looking statements
contained herein to reflect changed circumstances or
future events or developments or for any other reason.
Contacts
Topaz Partners
Tony Sapienza, 781-404-2407
tsapienza@topazpartners.com
Finetre Corporation
Jim Bolton, 703-234-0162
jbolton@finetre.com
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