BRIT Insurance Holdings PLC Signs Agreement to Acquire $7 Million Equity in ebix.com
ATLANTA--April 2, 2001--ebix.com Inc. announced today that it has signed an agreement with BRIT Insurance Holdings PLC (LSE: BRIT), for BRIT to acquire an equity stake in ebix. The terms of the Agreement include BRIT purchasing up to 6,944,000 ebix common stock in return for:
--A cash consideration of $7 million; and
--BRIT exchanging 3,913,542 of its holding of common stock in Insurance Broadcast System Inc. ("IBS"), representing 28% of IBS's issued share capital.
This values the total consideration in ebix at $8,680,000 or $1.25 per ebix share. The Agreement also contemplates that ebix and BRIT will negotiate and enter into an agreement for ebix to receive fees for reviewing, developing and servicing BRIT's e-commerce infrastructure.
Consummation of the Agreement will make BRIT ebix's largest stockholder, with almost 38% of ebix's outstanding common stock. BRIT is entitled to have ebix register its ebix stock for sale. In connection with the Agreement, ebix has terminated its Stockholder Rights Plan effective immediately, but BRIT has agreed not to acquire 49% or more of ebix common stock without the approval of the ebix Board of Directors.
The Agreement is contemplated to be consummated in two closings, the first, a BRIT cash purchase of 2,240,000 shares for $2.8 million, and the second covering the balance of the cash investment and the exchange for IBS stock. Each closing is subject to conditions typical in such transactions; the second is also subject to ebix stockholder approval of the transaction and of a charter amendment authorizing additional shares, and execution of the BRIT e-commerce strategy agreement. The parties expect the first closing to occur in mid-April, and the second closing to occur in June.
BRIT also has the right to designate two members of the Company's Board of Directors following the second closing.
"ebix.com has made a lot of progress in building cutting edge technology for the insurance industry, while successfully transforming a 25-year-old brick and mortar company into a leading online click and mortar company," Neil Eckert, Chief Executive Officer, BRIT Insurance Holdings PLC said. "Over the last 18 months, ebix.com has built world class infrastructure while keeping a tight control on their cost structure. This agreement is a reflection of our faith in the company's vision, concepts and management expertise towards making ebix.com a profitable leading online player in the insurance industry."
"This agreement and the contemplated strategic agreement will help us expand our revenue base in the European markets while providing resources to fund our growth in the e-commerce arena in the US markets," Robin Raina, President and CEO, ebix.com said. "Over the last 18 months, we have worked diligently towards building state-of- the-art infrastructure, analyst recognition, media recognition, strong carrier support and strategic agreements on one hand, while driving down our operating costs to manageable levels on the other hand. Now our clear focus is on top line growth and profitability, and this agreement is a step forward in that direction."
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE SECURITIES LITIGATION REFORM ACT OF 1995 - This press release contains various forward-looking statements and information that are based on ebix management's beliefs as well as assumptions made by and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, acceptance of ebix's products by the market and management's plans and objectives. Such statements are subject to various risks and uncertainties which could cause actual results to vary materially from those stated. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated expected or projected. Such risks and uncertainties include ebix's ability to obtain stockholder approvals needed to fully consummate the BRIT agreements and satisfy other conditions to such agreements, the extent to which the contemplated business initiatives are undertaken and are successful, the ability of ebix to overcome its recent history of operating losses and declining revenues, the availability and amount of future sources of capital and the terms thereof, the extent to which the ebix.com website can be successfully developed and marketed, the possible effects of the Securities and Exchange Commission's investigation of ebix's financial reporting, the risks associated with future acquisitions, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties, ebix's ability to continue to develop new products to effectively address market needs in an industry characterized by rapid technological change, ebix's dependence on the insurance industry (and in particular independent agents), the highly competitive and rapidly changing automation systems market, ebix's ability to effectively protect its applications software and other proprietary information, ebix's ability to attract and retain quality management, and software, technical sales and other personnel, the risks of disruption of ebix's internet connections or internal service problems, the possibly adverse effects of substantial increase in volume of traffic on ebix's website, mainframe and other servers, possible security breaches on the ebix website and the possible effects of insurance regulation on ebix's business. Certain of these as well as other risks and uncertainties are described in more detail in ebix's periodic filings pursuant to the Securities Exchange Act of 1934. ebix undertakes no obligation to update any such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events or developments.
About BRIT Insurance Holdings PLC
BRIT is a 250 million UK insurance holdings group with net asset value in excess of 240m. The group has a significant presence in both the Lloyds & the UK insurance company market, together with distribution businesses in the UK personal lines & small commercial market. For more details on the group, please go to www.britholdings.com
About Insurance Broadcast Systems, Inc.
Insurance Broadcast Systems, Inc. (IBS) is the premier broadcaster of streaming video to the insurance and financial services industry. The company specializes in email video messaging, continuing education, training, topical programs and live webcasts. IBS's unique streaming videos are powerful tools that assist agents, brokers and financial planners in the selling of insurance and financial products and services.
About ebix.com:
ebix.com, an HP Enabled E-Service which ebix.com Inc. launched on September 8, 1999, is the only site on the Web to meet the insurance needs of both the consumer and the insurance professional. ebix.com includes a virtual marketplace, ebix.mall, where consumers can define their policy coverages and seek competitive quotes from a number of carriers or agents/brokers in a timeframe defined by the consumer. This allows consumers to compare prices in a non-threatening environment and buy insurance online if they so desire.
ebix.com offers consumers access to over 1,000 agents representing nearly 2,000 different carriers, as well as 30 carriers quoting direct. ebix.com also incorporates powerful and secure business tools for agents/brokers, including the workflow and management engine ebix.link. ebix.link is currently being piloted by a number of leading carriers and agents in the United States, drawing from ebix.com Inc.'s strong business relationships with six of the ten largest insurance agencies in the world and over 3,000 agencies in the United States. This workflow engine, launched in January, can save insurance professionals up to 70 percent in time, energy and costs associated with processing day-to-day transactions.
About ebix.com Inc.:
Founded in 1976, ebix.com Inc. - formerly known as Delphi Information Systems, Inc. - is a leading international supplier of software and Internet solutions to the property & casualty insurance industry. The recent name change to ebix.com Inc. aligns the identity of the company with its strategic focus of using the Internet to enhance the way insurance business is transacted, through solutions that encompass both e-commerce and web-enabled agency management systems. An independent provider, ebix.com Inc. employs insurance and technology professionals who provide products, support and consultancy to over 3,000 customers on six continents.
For more information on ebix.com Inc. products and services, call 678-281-2020 or visit the ebix.com Inc. web site at www.ebix.com.