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Goldman Sachs PIA buys Ebix for $820M

by Demitri Diakantonis | Published May 2, 2013 at 10:03 AM

A Goldman, Sachs & Co. affiliate said Wednesday that it agreed to take software company Ebix Inc. private for about $820 million, including debt.

Goldman Sachs PIA is paying Ebix shareholders $20 per share in cash, valuing the target's equity at around $743 million. The buyer, among other things, houses Goldman Sachs' private equity arm.

Atlanta-based Ebix designs data software programs for more than 100 insurance companies. The target said going private will give it greater growth opportunities. Ebix has operations in the U.S., China, Brazil, India and New Zealand.

The announcement sent Ebix shares 10.7% higher, to $20.60, at the close of trading Wednesday.

"After considering a number of potential alternatives, the Ebix board, acting on the recommendation of a special committee compromised entirely of independent directors, unanimously approved this transaction, which provides significant and immediate value to shareholders," Ebix chairman and CEO Robin Raina said in a statement. "Ebix will be well-positioned as a private company to continue to execute on our strategic initiatives and pursue growth opportunities around the world."

Raina and other stockholders, who collectively own about 19% of Ebix's shares, have agreed to vote in favor of the acquisition.

The deal agreement gives Ebix a 45-day go-shop period to seek higher bids.

The two companies expect to complete the transaction by the end of the third quarter. The acquisition is not subject to any financing conditions.

Raina and Ebix's management team and employees are expected to remain in place.

Morgan Stanley's Ari Terry and Ira H. Cohen advised the special committee of Ebix's board, which was represented by Alston & Bird LLP and Richards, Layton & Finger PA.

Besides turning in-house for financial advice, Goldman Sachs relied on Credit Suisse Group. Both banks also provided debt financing commitments. Davis Polk & Wardwell LLP represented the buyer.

Separately on Wednesday, Goldman Sachs said that it completed the spinoff of a majority stake in reinsurance platform Global Atlantic Financial Group, formerly known as Goldman Sachs Reinsurance Group.

Goldman Sachs has no immediate plans to make Ebix part of its PIA division, but instead aims to keep it as a wholly owned independent subsidiary, according to a source familiar with the deal.

An Ebix spokesman declined to comment further on the transaction.

--Jonathan Marino contributed to this report.

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