Sherman & Company Holdings, formerly LMC Capital, advised Ebix on acquisition of A.D.A.M.
Combined Company w ill have a Powerful Health Information and Services Exchange for Employers, Benefits Brokers, Hospitals, Healthcare Organizations and Consumers
Ebix Expects the Merger to be Immediately Accretive and Generate 15 cents of Additional Diluted EPS in Year One
ATLANTA - (August 30, 2010) - Ebix, Inc. (NASDAQ: EBIX) a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today announced that it has signed a merger agreement with Atlanta-based A.D.A.M., Inc. (NASDAQ: ADAM), a leading provider of health information and benefits technology solutions in the United States. Ebix will acquire A.D.A.M. on a debt-free basis for aggregate merger consideration of $66 million.
Under terms of the merger agreement, which was unanimously approved by both Boards of Directors, A.D.A.M. shareholders will receive 0.3122 of Ebix common stock for each share of A.D.A.M. common stock in a tax-free reorganization, subject to certain adjustments specified in the merger agreement. The exchange ratio of 0.3122 is based on a $19.06 agreed value of Ebix common stock for purposes of the merger agreement. Upon the closing of the transaction, A.D.A.M. shareholders will own approximately seven (7) percent of the combined company.
Ebix Chairman of the Board, President and CEO, Robin Raina said, "This is a move that accelerates our health insurance strategy and that we believe positions us to win by offering even greater value to our customers and partners. In addition to the strategic benefits of combining two highly complementary Atlanta based organizations and product families, we believe we can create substantial shareholder value through significant cost structure improvements and access to new growth opportunities. At a particularly challenging time for the health insurance industry, we believe that this combination vaults the combined company into a powerful role with respect to employers, brokers, carriers and health insurance organizations – together we expect to shape the health insurance industry for years to come."
Robin added, "We expect the transaction to be accretive in the short and long term both. We expect the merger to deliver at least 15 cents in increased diluted EPS in the first 12 months after closing. This transaction will provide new cross selling opportunities on both sides while helping take A.D.A.M. services across the world. This deal is a strategic step forward to establish Ebix as a Health Information Exchange and is likely to be followed by other strategic steps in coming months and years."
Subject to the approval of A.D.A.M. shareholders, customary regulatory approval, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions, the transaction is expected to close later this year.
LMC Capital served as financial advisors to Ebix.