Ebix Acquires Fintechnix in Cash Deal
Ebix Australia has announced the purchase of Fintechnix in a transaction that closed on June 13. According to the announcement, Ebix paid $5.25 million in cash and no Ebix shares were included in the purchase price.
Both companies focus on insurance-oriented information technology, with Ebix operating as a dominant player in online processing in the general insurance sector and Fintechnix, founded in 1992, operating primarily in life insurance, with a complementary presence in wealth management and superannuation.
Ebix expects the acquisition to immediately add to the company’s earnings per share and, with Fintechnix based in Sydney, to provide improved access to Australian markets.
According to Ebix Managing Director Leon d’Apice, the acquisition was a good fit for the company following its entry into the life insurance market in the United States. "It had complementary solutions to our general insurance business, but we also see good growth opportunities for the business both here and overseas – especially in Asia," he said.
Ebix preferred to grow by acquisition in order to take advantage of the existing Fintechnix presence, rather than by entering the market with a new business venture of its own. In evaluating the transaction, d’Apice said, "The main reason behind the Fintechnix purchase was a lateral growth strategy for the company."
Fintechnix staff will stay in place under the new ownership. Its Managing Director, John Groves, said, "We look to leverage each other’s abilities to take a market leadership role in the Australian insurance markets."
The Fintechnix acquisition is not the only transaction that Ebix is pursuing. On June 5, it announced that it had made arrangements to purchase an Indian software company, PlanetSoft Inc., in a deal valued at $40 million. This is another purchase aimed at lateral growth, with PlanetSoft currently providing technological services to the life insurance industry in India and the United States. Robin Raina, Chairman, President and CEO of Ebix, called the move “a very strategic acquisition,” noting that the company would be able to merge investment and insurance operations “in an end-to-end transaction enabling straight through processing.” According to Raina, this will be the first truly comprehensive processing platform in the industry.
In addition to its Australian and U.S. operations, Ebix has offices in Brazil, Canada, India, New Zealand and Singapore, through which it conducts more than $100 billion in premiums.