Goldman Sachs, Ebix call off deal amid probe
by Associated Press Wire
June 20, 2013 08:40 AM | 658 views | 0 0 comments | 13 13 recommendations | email to a friend | print
ATLANTA (AP) — Goldman Sachs has called off its deal to buy Ebix because the insurance technology provider is facing an investigation into alleged misconduct at its business.

The disclosure sent shares of Atlanta-based Ebix down 40 percent in premarket trading Thursday. Ebix has denied the allegations of misconduct.

Goldman Sachs & Co. and Ebix Inc. announced the deal last month. Ebix stockholders were to receive $20 per share, or about $744 million based on its 37.2 million shares outstanding. They said the deal was worth $820 million including debt.

The companies announced Thursday that they had agreed to terminate the deal.

Ebix said that it received a letter on Friday from the U.S. Attorney General for the Northern District of Georgia that it opened an investigation into allegation of intentional misconduct brought to its attention by pending shareholder class-action lawsuits. Ebix said the lawsuits and an investigation by the Securities and Exchange Commission on the same issue were previously disclosed in its regulatory filings.

Ebix Chairman and CEO Robin Raina said in a statement that Ebix feels the lawsuits' allegations are without merit.

Pavan Bhalla, chairman of the special committee of the board, said that Ebix plans to fully cooperate with authorities.

The board said it plans to continue evaluating strategic options for the company.

There will be no termination fee paid by either Ebix or Goldman.

Shares of Ebix dropped $7.93, or 40.2 percent, to $11.79 in premarket trading. Its shares have traded in a 52-week range of $12.08 to $24.90.

Copyright 2013 The Associated Press.

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