Founded by Sudhir Bajaj in 1998, PlanetSoft provides IT services for the insurance sector with 90 per cent of its employees based in four offices in India.
According to Ebix, the acquisition is expected to be immediately accretive to its earnings per share and the deal is expected to be completed by next week.
Under the terms of the agreement, Ebix has acquired all outstanding capital stock of PlanetSoft for $35 million in cash besides its own stock worth $5 million. The deal will also involve earn-out cash payments to PlanetSoft shareholders, based on specific revenue numbers achieved in the next 24 months.
No financial advisors were involved in the transaction from the Ebix side.
PlanetSoft provides exchange solutions for the insurance sector in areas like agent licensing and new business underwriting.
Robin Raina, chairman, president & CEO of Ebix, said, "This is a very strategic acquisition for us since the combination of PlanetSoft and Ebix exchange products will give us the unique ability to converge insurance and investment operations from front-end to backend while converging lead generation, CRM, quoting, illustration, research, underwriting, compliance, policy issuance, claims, reinsurance, compensation management, agent appointment, etc., in an end-to-end transaction enabling straight-through processing. That simply has never been done earlier across the world by any software vendor in our industry."
"Ebix and PlanetSoft shared the common goal of end-to-end processing for the insurance industry. Both the companies are committed to SaaS-based exchange services targeted at automating the entire process of insurance across all entities," said PlanetSoft founder and CEO Sudhir Bajaj