Ebix, an Atlanta-based company that designs software for insurance companies, hopes to close it $820 million deal to be acquired by a Goldman Sachs Group affiliate in the third quarter.
Between now and then, the company has indicated it will continue to seek potential buyers, but a shareholder is suing to block the deal that is on the table with Goldman Sachs.
Ebix said Tuesday it would have no comment on the lawsuit.
Shareholder Navin Shah filed a lawsuit Monday in Delaware to block the deal, saying the buyout price is too low, according to a Bloomberg report on the suit. The price includes assumption of outstanding Ebix debt, the companies said.
It was not immediately known how many Ebix shares Shah owns. Chairman and Chief Executive Officer Robin Raina and the Rennes Fondation together own about 19 percent of the outstanding common shares. Both have indicated they will vote in favor of the deal. Ebix’s top five institutional investors are FMR LLC, BMO Financial, Vanguard Group, Wedge Capital Management and Capitol World Investors.
Shah’s suit said Ebix’s board of directors, which unanimously approved the acquisition, agreed to pay a breakup fee of as much as $27 million to Goldman Sachs. Shah said directors want to dissuade other potential buyers so they will get to keep their jobs.
Under the terms of its agreement with Goldman Sachs, Ebix shareholders will receive $20 a share in cash. Ebix said this was a premium of about 18 percent over the company’s average daily closing price over the preceding 30 days.
Ebix’s shares traded higher Tuesday, at $19.54, up 4 cents.
When it announced its deal on May 1, Ebix said the agreement with Goldman Sachs included a “go shop” provision to seek alternative proposals from third parties over the next 45 days. Ebix said it will “actively solicit acquisition proposals” during this period, but added there were no assurances one would emerge.
After the deal closes, Ebix will become private. The company’s software powers exchanges for life, annuity, health and property & casualty insurance providers. The company has offices in the U.S. Canada, Brazil, Singapore, Australia, New Zealand and India.
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