By Angela McDaniels
Seattle, Jan. 25 - Ebix, Inc. said it has made a proposal to acquire all of the outstanding common stock of Docucorp International Inc. for $11 per Docucorp share in cash and Ebix stock, or a total equity value of $140 million.
The offer represents a 10.2% premium on the proposed merger offer price of $10 per share, or $127 million, given by Skywire Software in December and a 33% premium on the six-month average closing price for Docucorp's common stock.
Docucorp said it received the letter from Ebix proposing the acquisition and that the letter was insufficient to allow Docucorp to respond to Ebix's proposal under the terms of its merger agreement with Skywire, according to an 8-K report filed with the Securities and Exchange Commission on Thursday.
Offer details
The total purchase price of $140 million would include $45 million in cash and $95 million in the form of 3,467,153 shares of newly registered Ebix stock valued at $27.40 per share, which is the preceding 30-day average price of the Ebix common stock.
In a company news release, Ebix proposed to pass on to Docucorp shareholders up to 10% of any price appreciation in the Ebix shares beyond the 30-day average price of $27.40. Beyond such appreciation, the number of shares provided in the offer would be reduced to bring the total value of the equity consideration to about $104.5 million.
Similarly, in the event of a decrease in the price of Ebix shares prior to the proposed merger, the number of shares would automatically be increased to bring the equity value up to $95 million. This provision would hold true up to a collar value of $24.50 for the Ebix stock, or a maximum of 3.88 million Ebix shares, the company said.
Taking the possible appreciation or decline in the share price into account, the Ebix offer would be $140 million at the low end and $149.5 million at the high end.
The company said it is open to increasing the cash component of its offer if the need arises and if the Docucorp board determines that this would be in the best interest of its shareholders.
Ebix has already secured a preliminary commitment letter to handle the $45 million cash component, according to the release, and to generate additional cash for closing, Ebix plans to sell shares of its common stock to a group of institutional investors.
Docucorp is a Dallas-based business software firm.
Atlanta-based Ebix supplies software and e-commerce products to the insurance industry.
Skyline is a diversified software company based in Frisco, Texas, that specializes in insurance, financial services and enterprise services management.
| Acquirers: | Ebix, Inc. and Skyline Software
|
| Target: | Docucorp International Inc.
|
| Payment per share: | $11 offer from Ebix, $10 offer from Skyline
|
| Announcement date: | Jan. 25 for Ebix, Dec. 6 for Skyline
|
| Stock price for target: | Nasdaq: DOCC; $10.48 on Jan. 25
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
