This excerpt taken from the EBIX 8-K filed Nov 7, 2007.
EBIX ACQUIRES CALIFORNIA BASED INSURANCE BPOINSURANCE DATA SERVICES (IDS)
ATLANTA, GANovember 2, 2007Ebix, Inc. (NASDAQ: EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today announced that it has acquired California based JenQuest, Inc. and its subsidiary Insurance Data Services through a merger effective November 1, 2007.
Founded in 1990, Insurance Data Services (http://www.certsonline.com), a wholly owned subsidiary of JenQuest, pioneered the first outsourcing application for Certificate of Insurance tracking. Over the years, IDS has emerged as the leader in the certificate of insurance tracking industry with a customer base spread across 20 different industries. It services these customers from its national service center based in Hemet, California through an employee base of approximately 100 employees. The acquisition is expected to be accretive to Ebix earnings per share ("EPS") in the near and long term future.
The deal will involve upfront cash payments of $11.25 million to JenQuest shareholders plus a potential earn-out cash payment of up to $1.35 million paid 12 months from the date of acquisition, if specific revenue targets of the IDS BPO division of Ebix are achieved. Ebix primarily funded this transaction through internal sources using its own cash reserves. No Ebix shares were issued in the transaction.
Robin Raina, Chairman, President and CEO of Ebix, Inc., said, "The acquisition of IDS is a step towards even better utilizing our present infrastructure in India and establishing Ebix as a leading BPO provider in the insurance industry. With a customer base ranging from top names like Home Depot, Lowes, Sears, Costco, Amazon, BJ, DR Horton, Lennar Homes, JC Penney, Harley Davidson, Pulte Homes, etc., IDS has emerged as the leader in the insurance certificate tracking business and was a perfect fit for Ebix."
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 IDS builds on this strategy of growth through recurring revenue derived from providing back-end services related to the insurance sector. This acquisition is a perfect complement to our India development and BPO services infrastructure as India will help us grow IDS revenues while bringing costs down."
"We are especially pleased that the acquisition provides us with a cohesive management team and an employee base that has delivered consistently and brings additional specialized insurance BPO expertise to Ebix," added Raina. "We intend to immediately integrate IDS into our existing Ebix BPO division"
No financial advisors were involved in the transaction from the Ebix side. Donaldson Werth & Company served as financial advisors to JenQuest for this transaction.