Insurance software and e-commerce provider Ebix, Inc. has signed a deal to acquire Pittsburgh based-Acclamation Systems, a provider of SaaS-based healthcare benefits and claims management software.
The deal will involve an upfront cash payment of $22 million to Acclamation shareholders plus a potential earn-out cash payment of up to $3 million paid over a period of two years from the date of acquisition, provided that specific revenue targets of the Health Benefits division of Ebix are achieved.
Ebix funded the acquisition through a mix of convertible debt and internal sources using its own cash reserves.
"The acquisition of Acclamation Systems is another step towards solidifying Ebix's position as a leading global powerhouse of insurance automation and expertise," said Robin Raina, chairman, president and CEO of Ebix. "It will also mark Ebix's entry into the fast-growing health benefits and claims processing sector of the insurance industry."
Acclamation's product, LuminX, provides organizations with an end-to-end, automated system for administering health and other employee benefits. The company also offers a number of Web tools, including online eligibility and enrollment, comprehensive reporting, full accounting capabilities, integrated technologies and BPO outsourcing services.
"Ebix is an acknowledged leader in the insurance automation space and will provide Acclamation with access to the resources and relationships in the health benefits sector that are needed to take the next great leap forward," said Jim Senge, Acclamation's senior vice president and division head. "They provide a natural home for Acclamation, and we're excited that our current and future clients will benefit from all that Ebix brings to the table."
"We are pleased that the acquisition provides us with a cohesive management team under the leadership of Jim Senge and an employee base that has delivered consistently and brings specialized health and claims expertise to Ebix," added Raina. "On the economic front, we are excited about this acquisition on many accounts. Firstly it brings a revenue base to the company that is 60 percent recurring. Secondly it is a business that is likely to be accretive to Ebix earnings per share (EPS) in the near and long term future."