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Ebix to Acquire A.D.A.M.

By Anil Sharma
TMCnet Contributor

Ebix, Inc., an international supplier of On-Demand software and e-commerce services to the insurance industry, has signed a merger agreement with Atlanta based A.D.A.M., Inc., a provider of health information and benefits technology solutions in the United States.

Ebix (News - Alert) will acquire A.D.A.M. on a debt-free basis for aggregate merger consideration of $66 million.

"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”, said Robin Raina, chairman of the board, president and CEO, Ebix in a statement.

“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,” said Raina.

He said that at a particularly challenging time for the health insurance industry, the company believes 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.”

"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,” he said.

Raina said that 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.

"We are excited to be merging the two companies to create a leading health information and services exchange player in the United States, at a critical time in the health industry,” said Bob Cramer, A.D.A.M. chairman of the board.

Cramer said that the company believes that the combined operations will help the customers by bringing broader solutions to them, leveraging both companies' commitment to world-class service levels, and because this will reduce the burden of public company costs incurred by Adam on a standalone basis.

“We believe the merger will allow for continuing investment in developing leading edge products in A.D.A.M.'s core markets,” he said.