Why Ebix Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ebix have soared today by as much as 14% after the company agreed to sell itself to a Goldman Sachs affiliate.

So what: The total value of the deal is roughly $820 million, including the assumption of outstanding debt, and represents an offer of $20 per share to shareholders. That's a premium of 18% over Ebix's average closing price over the past month.

Now what: CEO Robin Raina said a special committee of independent directors unanimously approved of the deal, saying it will deliver significant and immediate value to shareholders. There is a 45-day window where Ebix can garner alternative bids. Investors are more skeptical of the deal though, as there have been a handful of shareholder lawsuits announced in the wake of the announcement, alleging that the proposed deal is riddled with conflicts of interest regarding Raina's 19% stake in the company.

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The article Why Ebix Shares Soared originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Ebix and Goldman Sachs. The Motley Fool owns shares of Ebix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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