Ebix announces bankruptcy, plan to sell life and annuity assets to Zinnia

By John Hilton

Ebix, Inc. announced today that it has reached a "stalking horse" agreement to sell its North American life and annuity assets to Zinnia for $400 million, part of a bankruptcy reorganization plan.

A leading international supplier of on-demand software and e-commerce services to insurance and financial services, Ebix is filing for Chapter 11 protection of its U.S.-based operations, the company announced.

An Eldridge Industries company, Zinnia is a leading life insurance and annuity technology and service company based in Topeka, Kansas. The life and annuity assets being sold accounted for 14.5% of Ebix's worldwide GAAP revenues for the first three quarters of 2023, Ebix said.

"This agreement is part of the strategic decision by the Company to seek a value-maximizing transaction that will benefit all stakeholders and put the company on the path towards sustainable growth and profitability," Ebix said in a news release.

Ebix's life and annuity assets include AnnuityNet and LifeSpeed, an order entry platform; WinFlex, a market-leading multi-carrier illustration tool used by over 35 carriers and more than 275,000 users; TPP (The Policy Processor), an underwriting platform; and SmartOffice, an insurance vertical driven CRM tool used by more than 35,000 agencies and advisors.

Ebix stock plummeted Monday upon the bankruptcy announcement. Shares that traded for more than $80 in 2018 bottomed out at a dollar and change.

All worldwide operations of the company will continue to operate in the ordinary course and without any interruption, the Ebix release said.

Ebix has secured the "debtor-in-possession financing" from its existing lenders to consummate these sale and continue business in the ordinary course, the release added. Zinnia's proposed acquisition of the life and annuity assets would allow for "a seamless transition for Ebix's customers."

"Zinna's proposal acts as a baseline for competitive bids for the acquisition of our North American Life and Annuity assets to a prospective strategic software company, who can seamlessly handle our NA L&A customer base," said Robin Raina, president and CEO of Ebix. "With less than 15% of our worldwide revenues coming from the NA L&A assets being sold to address the credit, and the rest of the businesses of the Company continuing to exhibit strong fundamentals, we believe that the Company's future is bright – with strong operating fundamentals, a robust business model, world-class products, and a continued ability to generate healthy operating cash flows across the world."

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.