Wall Street

Ebix Announces Acquisition of Leading Australian Agency Systems Company Heart Consulting Pty Ltd.

Acquisition Ensures Ebix A Leadership Role in Australian Markets and Is Expected to Be Accretive In Earnings For Ebix's 2004 EPS

ATLANTA--(BUSINESS WIRE)--June 28, 2004--Ebix, Inc. (NASDAQ: EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today announced that it has signed an agreement to acquire the operating assets of Melbourne-based Heart Consulting Pty Ltd. The acquisition, Ebix's second this year is expected to be add in excess of 700 brokers in Australia to Ebix's roster of customers, providing Ebix with a leadership role in the Australian markets.
Under terms of the agreement, Ebix will acquire the operating assets of Heart in exchange for an aggregate purchase price (in Australian dollars) of A$10,175,000 (approximately US$7,017,000 at today's exchange rate), payable as follows:

-- A$5,175,000 (approximately US$3,569,000 at today's exchange rate) to be paid in cash at closing.

-- A$2,000,000 (approximately US$1,379,000 at today's exchange rate) payable in cash, without interest, over a period of three years.

-- A$3,000,000 (approximately US$2,069,000 at today's exchange rate) payable in shares of the common stock of Ebix to be issued at the time of closing (based on Ebix's average closing share price over the 30-day period prior to the closing).

The closing of the acquisition, which is subject to customary conditions, is expected to occur at the beginning of July 2004. Ebix intends to integrate this company's operations into its existing Australian company's operations in Sydney, while retaining all the Melbourne based employees of Heart Consulting. Ebix announced that it has named Leon D'Apice, Managing Director of Ebix's existing Sydney based Australian subsidiary to head the joint operations in Australia after the acquisition.

Accretive Acquisition for Ebix

Ebix anticipates that Heart Consulting Pty Ltd. will achieve revenues of approximately $3.0 million for the 12-month period ending 30th June 2004, up approximately 36% from the prior 12-month period, with EBITDA of approximately $ 1.8 million. The acquisition is expected to be accretive in earnings to Ebix for 2004.

Leadership Position in the Australian Markets

-- With this acquisition, Ebix would acquire a leadership position in the Australian markets as an agency systems vendor.

-- In addition, Ebix anticipates that this acquisition will provide Ebix with a steady revenue stream from a base of hundreds of agents currently using the ASP-based agency system provided by Heart.

"Acquisitions are an important component of our growth strategy for Ebix, and Heart is a natural fit for Ebix since it met all our requirements of our acquisition plan. First, it is expected to be accretive in terms of positive cash flows and earnings both with no existing debts as on date. Second, the acquisition will make Ebix a leading player in a niche area of insurance software in Australia." Robin Raina President & CEO of Ebix, Inc. said, "Third, the acquisition fits into our technology vision of providing anytime, anyplace, anywhere ASP technologies to the insurance markets. Finally, the acquisition should allow us cross selling opportunities in terms of providing services in two key areas: (1) Exchange of data between different insurance entities and (2) Providing insurance company systems.

About Ebix

Founded in 1976, the company is one of the leading international suppliers of software and e-commerce solutions to the insurance industry. The company strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges.

Ebix combines new technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and Web and application hosting to meet the individual needs of organizations. The company is in the process of seeking SEI CMM Level 4 certification for its development units in India and has already secured an ISO 9001:2000 certification for both its development and call center units in India. For more information, visit the company's Web site at www.ebix.com.

The company provides a series of application software for the insurance industry ranging from carrier systems, agency systems, exchanges to custom software development for entities involved in the insurance and financial industries. The company, with bases in Singapore, Australia, US, New Zealand, India and Canada, employs insurance and technology professionals who provide products, support and consultancy to more than 3,000 customers on six continents. For additional information about Heart, please visit www.ebix.com

About Heart Consulting Pty Ltd.

Heart Consulting Services Pty Ltd is an Australian wholly owned company, specializing in providing software and related services to the Insurance broker markets for over 20 years now. Heart's flagship application, WinBEAT is an Application Service Provider (ASP) system provided to more than 700 Australian Insurance Intermediary sites with over 3,500 users Australia-wide. For additional information about Heart, please visit www.heart.com.au

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

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. Ebix has tried to identify such forward looking statements by use of such words as "will," "expects," "intends," "anticipates," "plans," "believes," "should" and similar expressions, but these words are not the exclusive means of identifying such statements. Such statements are subject to various risks, uncertainties and other factors which could cause actual results to vary materially from those expressed in, or implied by, the forward looking statements. Such risks, uncertainties and other factors include the extent to which the Ebix.com website and other new products and services can be successfully developed and marketed, integration and other risks associated with the acquisition of Heart (including the risk that the acquisition is not consummated) and any other acquisitions, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties, possible governmental regulation and/or other adverse consequences resulting from negative perception of the outsourcing of business processes to foreign countries, 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 a few customers, Ebix's dependence on the insurance industry, 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 possible adverse effects of a substantial increase in volume of traffic on Ebix's website, mainframe and other servers, possible security breaches on the ebix website, the possible effects of insurance regulation on ebix, the possible effects of the Securities and Exchange Commission's investigation of Ebix's financial reporting, and possible future terrorist attacks or acts of war. Certain of these, as well as other risks, uncertainties and other factors, are described in more detail in Ebix's periodic filings with the Securities Exchange Act of 1934, including Ebix's quarterly report on Form 10-Q for the quarter ended March 31, 2004. Except as expressly required by the federal securities laws, Ebix undertakes no obligation to update any such factors or any of the forward-looking statements contained herein to reflect changed circumstances or future events or developments or for any other reason



Note:

* Depreciation for the 12 months ending June 30, 2005 is expected to be US $16,000

**Amortization for the 12 months ending June 30, 2005 is expected to be US $150,000

Exchange Rate: $AUSD 1.0 = $ USD 0.69

Contacts


Ebix, Inc.
Robin Raina, President/CEO, 678/281-2020
or
Jaffoni & Collins Incorporated
Robert L. Rinderman or David C. Collins, 212/835-8500
EBIX@jcir.com

[ Comment, Edit or Article Submission ]