Transaction Overview

Ebix Inc : Ebix Signs Agreement to Acquire Finetre Corporation

9/25/2006

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 an agreement 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."

Sherman & Company, formerly 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

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