Ebix Inc (NASDAQ:EBIX) has just announced that it’s merging with an affiliate of Goldman, Sachs & Co. Shares of Ebix rose as much as 12.5 percent in Wednesday morning trades after the announcement. The deal is worth about $820 million and includes the assumption of outstanding debt.
Problems with Ebix
Ebix Inc (NASDAQ:EBIX) has been under investigation by the U.S. Securities and Exchange Commission since late last year. Since then, the research firm Gotham City has called the company’s accounting practices “unreliable,” and said its CEO was intentionally misleading investors.
As part of the proposed agreement, shareholders of Ebix Inc (NASDAQ:EBIX) will receive $20 per share in cash, which is about an 18 percent premium over the company’s average daily closing price over the last 30 days. The company’s board of directors has approved the merger and is recommending that shareholders approve it as well. The proposed merger must also still receive antitrust approvals.
In a statement this morning, Ebix Inc (NASDAQ:EBIX) said Robin Raina and the Rennes Foundation, which own together approximately 19 percent of its stock, have each entered into separate agreements in which they said they would vote their shares in favor of the merger.
The agreement does include a “go-shop” period of 45 days in which Ebix will be able to look for alternative proposals from other parties. The company’s special committee and its advisors will solicit proposals during this time.
The deal is expected to close in the third quarter of this year. When it does, Ebix Inc (NASDAQ:EBIX) will go private and its shares will no longer be listed on any public stock exchange.