Ebix Inc (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries, stock plunged 19.62% on October 8th, 2018 but slightly recovered today by 5.3% (as of 9 Oct, 9:48 AM GMT-4; Source: Google finance).
The company has recently approved a five-for-one split of the company’s common stock, which is subject to shareholder approval of an amendment to the Company’s Certificate of Incorporation.
Meanwhile, EBIX’s one of its Indian subsidiaries has signed the agreement to acquire Mumbai based Miles Software for an amount of approximately $19 million, with an additional contingent earn out of up to $8.5 million payable after 2 years. Miles is India’s Leading wealth and asset management on-demand software provider to banks, asset managers and wealth management firms, besides having 300+ financial service customers across 18 different countries in Europe, Middle East and South-East Asia. Miles Software will serve as Ebix’s Investment, Wealth and Asset Management Division with its products being interfaced across both EbixCash financial exchanges and EbixExchange insurance exchanges. In the FY 17, Miles had revenues of $8 million and EBITDA of approximately 8%. 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 8 cents in increased Diluted EPS, once the acquisition is fully integrated over the next 6 months. Ebix funded the acquisition using its internal cash reserves and did not use any investment bankers for the transaction. Aarayaa Advisory Services served as the exclusive financial advisors to Miles Software.
On the other hand, EBIX for the second quarter of 2018 has posted 44% increase in the revenue to $125.4 million compared to $87.4 million in Q2 2017. The Exchange channel continued to be Ebix’s largest, accounting for 82% of Q2 2018 revenues. Also, on a constant currency basis, year to date revenue increased 40% to $232.6 million as compared to $166.5 million during the same period in 2017. Q2 2018 operating margins increased to 31% as compared to 30% in Q2 2017. Operating income for Q2 2018 rose 44% to $38.3 million compared to $26.5 million in Q2 2017. Q2 2018 net income increased by 25% to $29.2 million, compared to $23.4 million in Q2 2017.