Ebix, Inc., a supplier of software and e-commerce services for the insurance industry worldwide, has made a proposal to acquire all of the outstanding common stock of Docucorp International Inc. for $11 per Docucorp share in cash and Ebix stock or a total equity value of approximately $140 million.
The offer represents a 10.2 percent premium on the proposed merger offer price given by Skywire Software and a 33 percent premium to the six months average closing price for Docucorp’s common stock.
Robin Raina, chairman and chief executive officer of Ebix Inc., outlined the proposed merger in a letter to Docucorp’s board of directors.
Ebix believes that the combination of Ebix and Docucorp would create a combined company with earnings per share of $ 2.00 or more and pro forma revenue of approximately $130 million. Ebix believes that the combined company can generate income after taxes of at least $16 million or more on an annualized basis.
Ebix proposes to pay for the transaction with $45 million in cash and $95 million in the formof 3,467,153 shares of newly registered Ebix stock, valued at $ 27.40 per share (the preceding 30 day average price of the Ebix common stock).
Ebix said it is open to increasing the cash component of its offer. To generate additional cash for closing, Ebix said it intends to sell shares of its common stock to a “select group of institutional investors who have shown an active interest in participating in a private placement of Ebix stock.”
Ebix said it sees significant synergies between the two companies that are likely to improve the bottom line by $6 million or more.
The combined company would have a reach across six continents and could allow for substantial cross-selling opportunities. Ebix today has customers across 50 countries in six continents, in property and casualty, life and annuity areas. The combined entity would have 32 offices and a customer base spanning six continents.
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