Ebix (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, announced today that it has signed an agreement to acquire Rio de Janeiro-based Insurance Exchange - Usix Technologies, Inc.
USIX was acquired by Sao Paulo based Ebix Latin America, the existing subsidiary of Ebix Singapore. The closing of the transaction will be completed on 28th September 2010. The acquisition is expected to be accretive to Ebix Earnings per Share (EPS).
USIX Technologies is a provider of Exchange solutions for the insurance industry in Brazil, specializing in Internet interface solutions for insurance companies and their agents. USIX's portfolio of Exchange solutions includes; pricing, multi-quoting for brokers, underwriting, contract binding and broker system solutions. The solutions are used in the Motor, Property and Life (individual and group life) sectors of the insurance industry in Brazil.
USIX solutions are utilized by some of the largest insurance companies in Brazil including the largest insurance carrier in Latin America - Bradesco Seguros and the 2nd largest carrier - SulAmerica. USIX's customer base for its exchange solutions includes local names like Bancobras, Banrisul, Porto Seguro, Brasilveiculos Seguros, HDI Seguros, HSBC, MAPFRE Seguros, and Liberty Seguros, in addition to Bradesco and SulAmerica. The Company also provides Internet based On-Demand solutions to purchase two-wheeler insurance at dealerships of Honda, Yamaha and Sundown Motors across Brazil.
USIX is presently in the process of implementing an on-demand exchange based Broker system solution for the thousands of Brokers of Bradesco Seguros. The solution is targeted to be deployed across 30,000 brokers of Bradesco.
In total, the Brazilian insurance industry comprises around 140 companies, which range from small locally owned companies to large multi-national organizations. Currently the total insurance market revenue is over $57 billion. This industry has been growing over the last 5 years at a 12%-15% average yearly growth rate. The Life and Retirement Annuities sector alone has grown at an average rate of 25% per annum. This acquisition marks Ebix's entry into one of the fastest growing Property & Casualty and Life insurance exchange markets in the world. Ebix already runs an Annuity portability Exchange in Brazil that is utilized by 40 different Life insurance Companies today.
This addition to Ebix Latin America helps the Company provide end-to-end processing solutions in the Brazilian insurance markets in Brazilian Portuguese. Ebix has already finished the customization and translation of its CRM and on-demand Carrier systems services for Brazil. The acquired exchange solutions in conjunction with Ebix's Health, Life and P&C solutions provides Ebix the ability to be the one-stop Enterprise solutions provider to any large insurance Company in Brazil.
Robin Raina, President & CEO of Ebix, Inc. said, "Brazil is one of the fastest growing insurance markets in the world today and we are keen to position ourselves early in this market. USIX has a solution set that has become the engine of distribution of sales for many large carriers today in Brazil. USIX has on-Demand Exchange solutions that fit in tightly with our other solutions. They have a committed customer base with a strong growing revenue stream. In addition, they have solutions that can be deployed in other Latin American countries. All of that is clearly a great complement to our existing business today in Brazil."
Robin added, "USIX has a strong owner managed senior management team with a knowledge oriented employee base. The management team had a great record of growing revenues, seemed bullish about their future and was willing to be paid a large part of the sale price in the form of an Earn out, strictly tied to year-over-year growth in revenues. We liked the solution set, the enterprise play, the recurring revenue base and the energy levels of the management. All of that contributed to our decision-making. We believe that the transaction will be accretive to our shareholders in both the short and long-term."
Ebix considers the size of the acquisition immaterial at present and thus did not disclose the financial details of the transaction. Ebix funded this transaction through internal sources using its own cash reserves. No Ebix shares were issued and no investment bankers were involved in the transaction.