Global insurance professional and technological services giant Ebix is set to acquire US-based Patriot National. The transaction further expands Ebix’s capabilities within the workers compensation insurance technology and outsourced landscape, as well as its global footprint. The deal remains subject to due diligence and customary regulatory and other closing conditions.
Patriot National, headquartered in Fort Lauderdale, Florida, is a US-based provider of technology and outsourcing solutions for companies, particularly insurers, helping them to mitigate risks, comply with regulations and reduce costs. The company, which was founded in 2006 and went public in 2014, holds 13 subsidiaries that provides a range of services to clients, from general agency services, technology outsourcing and software solutions, to specialty underwriting, policyholder services and claims administration services. Patriot National was founded by serial entrepreneur Steven Mariano, who remains the Chairman, President and CEO. The company has revenues of $209.7 million (FY 2015), and employs 650+ professionals.
Ebix was founded in 1976 and provides a range of services, including On-Demand software, E-commerce services and consulting services to the insurance industry. The company, which employs more than 2,800 people, has more than 40 offices across Brazil, Singapore, Australia, the US, UK, New Zealand, India and Canada.
Ebix recently announced that it aims to acquire 100% of Patriot National for $9.50 per share. The deal would represent a 37% premium to Patriot National’s closing share price of $6.92 as of 14 June, 2016. For Ebix there are multiple objectives to the deal, namely to provide shareholders with a merged organisation that is accretive; to expand its portfolio of services for the insurance industry, with the addition of Patriot’s workers compensation insurance technology and outsourced services; and to expanded international cross selling opportunities, as the merger enhances the firm's footprint.
The deal remains subject to due diligence and customary regulatory and other closing conditions, and will be combed over by the investment banking advisory firm Sherman & Company of New York.
Ebix president and CEO Robin Raina, comments "We believe that Patriot National’s products and services are complementary to Ebix in the insurance industry and a combination of the two companies would lend itself to significant synergies and the creation of the global insurance industry’s largest end-to-end software services company. We see substantial synergies, economies of scale and expanded growth potential for the combined business. Our interest in making an offer for Patriot National is also borne out of our firm belief that a combination of the two companies could be substantially and immediately accretive to Ebix's EPS."