| Item 1.01 | Entry into a Material Definitive Agreement. |
The information set forth below in Item 2.01 in this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As previously disclosed, on December 17, 2023, Ebix, Inc. (the “Company”), and certain of its direct and indirect subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas (such court, the “Bankruptcy Court” and such proceedings, the “Chapter 11 Cases”). The Chapter 11 Cases are currently jointly administered under the caption In re Ebix, Inc., et al., Case No. 23-80004 (SWE). The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
As previously announced, on December 18, 2023, the Company entered into a binding “stalking horse” asset purchase agreement (the “Stalking Horse APA”) with Zinnia Distributor Solutions, LLC, a wholly owned subsidiary of Zinnia Corporate Holdings, LLC (the “Purchaser”), pursuant to which the Purchaser agreed to purchase, subject to the terms and conditions contained therein, the North American Life and Annuity assets (the “NA L&A Assets”) of the Company and certain of its subsidiaries (the “Seller Group”).
Under the terms of the Stalking Horse APA, the Purchaser agreed, subject to Bankruptcy Court approval and absent any higher or otherwise better bid, to acquire the NA L&A Assets from the Seller Group for a base amount of $400 million, subject to certain adjustments in accordance with the terms and conditions of the Stalking Horse APA, plus the assumption of specified liabilities related to the Transferred Assets. The Stalking Horse APA included customary representations and warranties and various customary covenants under the circumstances that are subject to certain limitations, including, without limitation, a break-up fee and expense reimbursement and the right to designate executory contracts and unexpired leases to assume or reject.
The acquisition of the NA L&A Assets by the Purchaser pursuant to the Stalking Horse APA was approved by the Bankruptcy Court on February 16, 2024. No other qualifying bids were received and accordingly, no auction was held.
On April 1, 2024, the Company and the Purchaser amended the Stalking Horse APA to add a Tax Holdback Amount equal to $8 million, to adjust the estimated purchase price and to add a provision regarding Indian Tax liability. The Company consummated the sale of the NA L&A Assets as contemplated by the Stalking Horse APA, as amended thereby completing the disposition of the aforementioned assets on April 1, 2024.
In connection with the sale of the NA L&A Assets, the adjusted preliminary Purchase Price of $386.5 million was paid by the Purchaser and the net proceeds were (i) used to pay down the drawn DIP (including the “rolled up” portion of the pre-petition DIP) in the amount of approximately $93 million, and (ii) certain expenses of sale. The balance is currently held subject to Bankruptcy Court approval.
The foregoing description of the Stalking Horse APA and the amendment to the Stalking Horse APA is qualified in its entirety by reference to the Stalking Horse APA, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1, and the Amendment to the Stalking Horse APA, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.2 and is hereby incorporated herein by reference.
Cautionary Statements Regarding Trading in the Company’s Securities.
The Company cautions that trading in its securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s securities may bear little or no relationship
