Ebix, Inc. (NASDAQ:EBIX), a leading international supplier of
On-Demand software and E-commerce services to the insurance,
financial, e-governance and healthcare industries, today announced
that it has entered into an agreement to acquire India based
CentrumDirect Limited (CDL), the undisputed Leader in India’s
Foreign Exchange and outward remittance markets for approximately
$175 million. CDL will be tightly integrated into Ebix’s Financial
Exchange EbixCash offering in India and abroad, with key CDL
business executives becoming an integral part of the combined
EbixCash senior leadership.
The agreement while approved by the Centrum
Board, is subject to its shareholders and other
regulatory/commercial approvals. The customary process for such
approvals can take a timeline of 45 to 60 days.
Ebix did not use any investment bankers for the
transaction. Ebix intends to fund the entire transaction in cash,
using its existing bank line and internal cash reserves, though it
retains the option at its sole discretion of paying up to $60
million in Ebix stock priced based on the average share price at
closing. In the calendar year 2017, CDL had revenues of $37
million and EBITDA margins of approximately 25%. Ebix believes that
the business can continue to grow at the rate of 20% plus annually
with operating margins of 30% or more, once fully integrated. Ebix
expects the acquisition to be immediately accretive to its earnings
and forecasts it to generate $0.25 in increased Diluted EPS.
CDL is an Omni-channel exchange that offers a
variety of Foreign Exchange and outward money remittance products
targeting niche sectors like leisure travel, corporate travel,
overseas education related remittances, airport money exchange
including duty free shops, tour cost remittances of travel agents,
disbursement of crew wages to ships docked on Indian shores,
immigration related remittance, retail and wholesale currency
markets. CDL is one of the few named players in India with the
requisite AD-II and FMCG regulatory licenses to conduct these
businesses through a vast network encompassing 165 outlets spread
across 55 cities, 200+ franchisee partners, 2,000+ travel agents,
50+ banks and financial institutions, 1000+ SMEs, and 150+ large
corporate clients.
CDL’s Forex Exchange has an approximate 70%
market share of India’s airport Foreign Exchange business
encompassing 24 international airports like Delhi, Mumbai,
Bangalore, Chennai and Kolkata International airports, while
conducting over 1 million transactions per annum. The Company is
also in the process of initiating contracts with a number of
international airports outside India in countries like Sri Lanka,
Singapore, Bangladesh, Maldives and Seychelles to name a few. The
CDL Exchange also has a 15% market share in India’s fast growing
$1.5 Billion education outward remittance business.
Leadership in India’s Financial Exchange
markets
- The CDL Exchange establishes
EbixCash as a leader in the outward remittance and Forex
markets.
- The CDL Exchange is highly
complementary to EbixCash’s Via.com travel exchange offering,
because it now allows EbixCash’s travel outlets to sell Forex to
its clients buying international travel.
- The CDL Exchange will bring
thousands of travel agents, large corporates, SMEs and new outlets
to EbixCash’s existing travel network offering. EbixCash through
its travel portal Via.com is one of South East Asia’s leading
travel exchanges with over 110,000 distribution outlets and 8,000
corporate clients, processing over 24.5 million transactions every
year.
- CDL’s presence in 24 international
airports lends itself well to marketing the EbixCash brand to
Indian and international consumers at these airports, besides being
a very recurring source of business for EbixCash.
- The addition of the CDL Exchange
further expands EbixCash Financial Exchange’s footprint from its
existing 231,500 physical distribution outlets, with an
Omni-channel online digital platform that encompasses leadership in
money remittance (domestic & international), travel, prepaid
& gift cards, utility payments, etc.
- CDL’s corporate business is highly
synergistic with EbixCash’s existing corporate business, as it now
provides EbixCash the ability to sell Digital Forex and
multicurrency cards, etc. to its existing thousands of corporate
clients. EbixCash’s existing corporate clients are presently
provided a variety of offerings including utility payments,
corporate gifting, cash management, tele-medicine for employees,
travel bookings, prepaid gift cards, etc.
- The addition of the CDL Exchange to
the EbixCash portfolio further strengthens Ebix’s leadership in
India’s Financial Exchange markets:
-
- EbixCash already has a dominant
leadership position in the inward remittance exchange arena in
India.
- EbixCash is already the largest
domestic remittance exchange in India with domestic remittance
volume of approximately $100 million per month.
- EbixCash is also a recognized
leader in prepaid cards, domestic remittances and bill payments,
processing approximately 600,000 transactions per day and
approximately $2 Billion in annual payment volume.
- EbixCash is already recognized as a
leader in the gift card space with brand gift cards across all
categories with 100+ Brand copartners like Amazon, Flipkart.com,
Croma, Lifestyle, Big Bazaar, Tanishq, BookMyShow.com, Reliance
Digital, MakeMyTrip.com, Café Coffee Day, Pizza Hut, Myntra.com,
Pantaloon, etc.
- EbixCash is a leader in the utility
payment space serving as a payment exchange for large utility
providers like BSES, Tata Power, NDPL, Reliance Energy Mahanagar
Gas, etc.
- Ebix’s recent joint venture
initiative with Bombay Stock Exchange positions it as a gateway for
insurance carriers to sell insurance to India’s vast population
through EbixCash’s tens of thousands of phygital outlets across the
country, besides BSE’s strong network across the country.
Ebix Chairman, President and CEO Robin Raina
said, “The acquisition of CDL provides us with new abilities in
niche Financial Exchange sectors while expanding our footprint in
India and establishing our EbixCash Financial Exchange as the
largest Financial Exchange in the country. We have been eager to
build a strong footprint in India’s airports and shipping ports, as
their high levels of customer traffic provide recurring sources of
revenue and income for any Financial Exchange. With a long-term
presence in 24 international airports, and a few others to be
deployed this year, the addition of CDL will substantially extend
EbixCash’s branding and leadership position in India’s Financial
Exchange markets.”
Robin added, “CDL already has a strong financial
trajectory in terms of top line and operating margins, though we
intend to build upon its success through complementary products and
operational synergies. I am particularly pleased that the CDL
acquisition will also further strengthen our management resources
with the addition of CDL’s strong senior leadership team. We intend
to integrate this team into our EbixCash senior leadership, with
the goal of having everyone at EbixCash focused on maximizing
cross-selling of EbixCash products and services.”
CDL’s CEO & Managing Director,
T.C.Guruprasad said, “We are thrilled to join Ebix and contribute
to building a world-leading exchange. We believe that the synergies
between EbixCash and CDL are at multiple levels and the CDL
Exchange when complemented with EbixCash’s portfolio of finance,
insurance & healthcare services, will set the foundations of a
very powerful and scalable business opportunity. Also, Ebix’s
global reach and international partnerships with large financial
institutions open International expansion opportunities for our
products and services. We genuinely believe that EbixCash is the
logical home for CDL and are excited by the possibilities this
offers both for our customers and partners.”
About Ebix, Inc.
With 50+ offices across 5 continents, Ebix,
Inc., (NASDAQ:EBIX) endeavors to provide On-Demand software and
E-commerce services to the insurance, financial and healthcare
industries. In the Insurance sector, the Company’s main focus is to
develop and deploy a wide variety of insurance and reinsurance
exchanges on an on-demand basis, while also, providing
Software-as-a-Service ("SaaS") enterprise solutions in the area of
CRM, front-end & back-end systems, outsourced administrative
and risk compliance, across the world.
With a "Phygital” strategy that combines 231,500
physical distribution outlets in many Southeast Asian Nations
(“ASEAN”) countries to an Omni-channel online digital platform, the
Company’s EbixCash Financial Exchange portfolio encompasses
leadership in areas of domestic & international money
remittance, travel, prepaid & gift cards, utility payments,
etc., in an emerging country like India. EbixCash, through its
travel portal Via.com, is also one of Southeast Asia’s leading
travel exchanges with over 110,000 distribution outlets and 8,000
corporate clients processing over 24.5 million transactions every
year. For further details, visit www.ebixcash.com.
Through its various SaaS-based software
platforms, Ebix employs thousands of domain-specific technology
professionals to provide products, support and consultancy to
thousands of customers on six continents. For more information,
visit the Company’s website at www.ebix.com.
About CentrumDirect Limited
(CDL)
CentrumDirect Limited (CDL), a step-down
subsidiary of Centrum Capital Limited, is one of the leading
Authorized Category II Foreign Exchange service providers in India.
CDL provides a wide spectrum of travel related Foreign Exchange
services ranging from prepaid travel cards, travelers cheques,
foreign currency cash, demand drafts, inward and outward
remittances for permitted purposes, travel insurance and global
calling cards to its retail and institutional customers. CDL has
achieved a gross turnover of Rs.10,000 crore serving 3 million
happy customers during this fiscal year.
CDL through its wide network of 165 outlets
including 85 branches and 72 airport counters in 55 cities services
leading multinationals, large corporate entities, public sector
undertakings, banks, large tour operators and retail clients. CDL
has the largest presence in operating Foreign Exchange counters at
international airports in India. CDL is one of the largest sellers
of prepaid travel cards in the country offering white label
“Centrum Travel Card” issued by leading banks, which international
travelers use at overseas ATMs and merchant establishments. CDL
also deals in all major destination currencies and is one of the
leading aggregators of physical foreign currency notes across
India.
The Company has many firsts to its credit, like
introducing the first prepaid Forex card called the Centrum Travel
card. CDL offers a wide range of travel services such as Currency
Notes, Multi Currency Travel Cards, Remittance Services, Travelers
Checks and Travel Insurance. It also offers online sale &
purchase of Foreign Exchange through its portal
www.centrumforex.com.
SAFE HARBOR REGARDING FORWARD-LOOKING
STATEMENTS
As used herein, the terms “Ebix,” “the Company,”
“we,” “our” and “us” refer to Ebix, Inc., a Delaware corporation,
and its consolidated subsidiaries as a combined entity, except
where it is clear that the terms mean only Ebix, Inc.
The information contained in this Press Release
contains forward-looking statements and information within the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. This
information includes assumptions made by, and information currently
available to management, including statements regarding future
economic performance and financial condition, liquidity and capital
resources, acceptance of the Company's products by the market, and
management's plans and objectives. In addition, certain statements
included in this and our future filings with the Securities and
Exchange Commission ("SEC"), in press releases, and in oral and
written statements made by us or with our approval, which are not
statements of historical fact, are forward-looking statements.
Words such as "may," "could," "should," "would," "believe,"
"expect," "anticipate," "estimate," "intend," "seeks," "plan,"
"project," "continue," "predict," "will," "should," and other words
or expressions of similar meaning are intended by the Company to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are found at various places throughout
this report and in the documents incorporated herein by reference.
These statements are based on our current expectations about future
events or results and information that is currently available to
us, involve assumptions, risks, and uncertainties, and speak only
as of the date on which such statements are made.
Our actual results may differ materially from
those expressed or implied in these forward-looking statements.
Factors that may cause such a difference, include, but are not
limited to those discussed in our Annual Report on Form 10-K and
subsequent reports filed with the SEC, as well as: the risk of an
unfavorable outcome of the pending governmental investigations or
shareholder class action lawsuits, reputational harm caused by such
investigations and lawsuits, the willingness of independent
insurance agencies to outsource their computer and other processing
needs to third parties; pricing and other competitive pressures and
the Company's ability to gain or maintain share of sales as a
result of actions by competitors and others; changes in estimates
in critical accounting judgments; changes in or failure to comply
with laws and regulations, including accounting standards, taxation
requirements (including tax rate changes, new tax laws and revised
tax interpretations) in domestic or foreign jurisdictions; exchange
rate fluctuations and other risks associated with investments and
operations in foreign countries (particularly in Australia, UK and
India wherein we have significant operations); equity markets,
including market disruptions and significant interest rate
fluctuations, which may impede our access to, or increase the cost
of, external financing; and international conflict, including
terrorist acts.
Except as expressly required by the federal
securities laws, the Company undertakes no obligation to update any
such factors, or to publicly announce the results of, or changes to
any of the forward-looking statements contained herein to reflect
future events, developments, changed circumstances, or for any
other reason.
Readers should carefully review the disclosures
and the risk factors described in the documents we file from time
to time with the SEC, including future reports on Forms 10-Q and
8-K, and any amendments thereto. You may obtain our SEC filings at
our website, www.ebix.com under the "Investor Information" section,
or over the Internet at the SEC's web site, www.sec.gov.
CONTACT:
Bhavik Vasa
+91 9819389881 or bhavikv@ebixcash.com
Darren Joseph
678 -281-2027 or IR@ebix.com
David Collins or Chris Eddy
Catalyst Global - 212-924-9800 or ebix@catalyst-ir.com
Ebix (NASDAQ:EBIX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Ebix (NASDAQ:EBIX)
Historical Stock Chart
From Sep 2023 to Sep 2024