Ebix, Inc., a developer and supplier of software and e-commercesolutions to the insurance industry, has signed an agreement toacquire Finetre Corporation through a merger. The closing isexpected to occur on Oct. 2. Finetre is an ASP software technologyfirm focusing on transaction processing and compliance automationin the financial services industry. The acquisition gives Ebix anannuity exchange, AnnuityNet, which services approximately $15billion in annuity premiums each year over the Internet, and addsto Ebix's position as an exchange for life insurance salesillustrations through its EbixLife subsidiary.

The deal will involve upfront cash payments of $13 million toFinetre shareholders, according to Ebix, plus a potential earn-outcash payment of up to $3 million spread over two years if specificrevenue and net income targets of the Finetre division of Ebix areachieved. Ebix intends to fund this transaction through acombination of internal sources and a recently signed $12 millioncredit line with LaSalle Bank. No Ebix shares will be issued in thetransaction.

Ebix also announced in the future it intends to merge Finetrewith its wholly owned subsidiary EbixLife, creating a combinedentity that will increase operating efficiency at both companies.The integration is expected to spark expansion into new productlines, including life insurance transaction processing, since thecombined company will benefit from access to Ebix's developmentresources and the larger customer footprint of the combined entity.After the merger is complete, EbixLife will serve 48 insurers andhundreds of distributors, offering a complete suite of salessupport, transaction processing, and back-office automationproducts and services.

"Ebix will provide Finetre with access to the resources andrelationships in the life insurance sector that are needed to takethe next great leap forward," says Steve Dunlap, Finetre seniorvice president and chief marketing officer. "It provides a naturalhome for Finetre, and we're excited our current and future clientswill benefit from all that Ebix brings to the table."

"EbixLife provided us with a leadership position in the lifeinsurance sales illustration market while the acquisition ofFinetre will provide us with a leadership position in the annuityexchange market," says Robin Raina, chairman, president, and CEO ofEbix, Inc. "Both of these acquisitions complement each other interms of cross-selling and convergence opportunities. Also the lifeand annuity markets go hand in hand with a majority of annuitycarriers selling life insurance products and vice-versa."