Johns Creek – November 17, 2017 – 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 its Indian subsidiary Ebix Software India Private Limited and Vara Technologies Private Limited ("Vara Tech"), a Kanoria Foundation entity, have entered into a joint venture strategic partnership to target IT & BPO Outsourcing in the Financial & Insurance Sector in India.
VARA and Ebix executed a partnership agreement wherein Ebix agreed to infuse capital in Vara Tech's subsidiary Vara United Private Limited ("VARA") through subscription of newly issued shares, enabling Ebix to hold 50% stake, on the Closing of the Transaction. Ebix has valued VARA’s Enterprise Value at approximately $46 million. VARA at present has an annual revenue run rate of approximately $31 million. Closing of the transaction is subject to customary closing conditions and is expected over the next few weeks.
VARA at present is engaged in the business of providing IT & BPO Outsourcing to large Indian financial entities and has a long-term multi-year strategic outsourcing engagement involving a few thousand VARA employees, with one of India’s largest financial entities. VARA also provides embedded staffing, software development and infrastructure management services to its clients.
The new venture to be branded as VARA-Ebix, involves a capital infusion by Ebix that is expected to strengthen VARA's balance sheet through an improved capital structure. It will also bring strategic, operational and synergistic efficiencies to the joint venture through Ebix’s expertise, and technology strengths in the area of finance and insurance. The partnership would also enable VARA-Ebix to enhance its technological capabilities and delivery prowess through access to global best practices and product innovations, helping it to create stronger value proposition for its clients. Ebix would benefit through access and participation in the high growth BPO & IT outsourcing area of the Indian BFSI sector.
Commenting on the partnership, Mr. Sujit Kanoria, Director, VARA said, "Our partnership with Ebix is a concrete step in our business journey to further build on our solid foundation and would help us in achieving the goal of becoming a leading technology player in banking and financial services. This partnership will inculcate global best practices in the Company and would immensely help in creating enhanced value for our esteemed clients”.
Led by an Indian-American CEO, Ebix was recently ranked amongst the World’s 100 Fastest Growing Companies by Fortune magazine in September 2017. Ebix CEO Robin Raina who is presently visiting India, has the unique distinction of being the only CEO on Fortune’s 2017 list of Fastest Growing Companies in the world, who has featured on the coveted Fortune list 5 times in the last decade, and also providing more than 23,000 percent shareholder return since December 2000.
Ebix Group Chairman, President and CEO Robin Raina said, “The relationship with VARA represents a significant opportunity to expand our presence in the banking and financial services sector in India which is one of the leading high growth economies across the globe. With approximately 3,300 employees on customer assignments, VARA already has a strong presence in the BFSI sector in India. We are excited to invest in VARA towards establishing a strong presence in the BPO & IT outsourcing areas in the banking, insurance and financial sectors in India.”
Ebix expects the transaction to be immediately accretive to its shareholders. No investment bankers were involved in the transaction, with Ebix funding the transaction in cash using its cash reserves.
Vara Tech, a Kanoria Foundation entity, is one of the fast-growing technology service providers, which has embraced emerging technologies to offer customized solutions to its customers across Infrastructure, BFSI, and Healthcare sectors. Vara Tech has collaborations with various global OEMs which provides strategic advantages while delivering effective solutions to its customers. Vara Tech is headquartered in Kolkata and has multiple offices across India.
Kanoria Foundation is a trust entity founded by the Kanoria family. The Kanoria family has been in business for over two centuries. The Trust is engaged in both business investments and social initiatives. The business investments span the Infrastructure sector, i.e., from financing to development, from housing to hospitality and healthcare, from information technology to agriculture. The social impact initiatives are in the areas of health, education and spirituality.
Recently ranked amongst the World’s 100 Fastest Growing Companies by Fortune magazine in September 2017, Ebix is a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries. Ebix, Inc. provides end-to-end on-Demand solutions ranging from infrastructure exchanges, front end & back end enterprise systems, outsourced administrative & custom software development solutions, and risk compliance solutions for various entities involved in these industries.
With 45+ offices across Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK, Ebix powers multiple exchanges across the world in the field of finance, life, annuity, health and property & casualty insurance while conducting in excess of $100 billion in insurance premiums annually on its platforms. Through its various SaaS-based software platforms, Ebix employs hundreds of domain specific business and 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
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.
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