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 (NASDAQ: EBIX  ) have soared today by as much as 14% after the company agreed to sell itself to a Goldman Sachs (NYSE: GS  ) 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.

Interested in more info on Ebix? Add it to your watchlist by clicking here.

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