Patriot National Inc (NYSE:PN) Shares Surge on Buyout Offer from Ebix

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Patriot National Inc (NYSE:PN) shares were flat in after-hours trading. The company has a market cap of $225.64 million at 26.83 million shares outstanding. Shares are trading in a 52-week range of $3.56 to $19.52.

Patriot National is an independent national provider of technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk and comply with complex regulations. The company offers a range of end-to-end insurance related and specialty services, namely  front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. Apart from that, it also offers specialty services, including technology outsourcing and other information technology services, as well as employment pre-screening and background checks.

Meanwhile, Ebix is a supplier of software and e-commerce solutions to the insurance industry that provides application software products for the insurance industry, including carrier systems, agency systems and exchanges, as well as custom software development. Ebix has offered to buy Patriot National for $9.50 per share, a considerable premium over the current stock price.

We believe that Patriot National’s products and services are complementary to Ebix in the insurance industry and a combination of the two companies would lend itself to significant synergies and the creation of the global insurance industry’s largest end-to-end software services company,” remarked Ebix President and CEO Robin Raina.

With this buyout offer, Ebix plans to pay for at least 55% of purchase in cash and the 45% balance in cash and stock as mutually agreed upon. This takes into consideration Patriot National’s receivables, cash, other assets as well as current and long-term liabilities and retained the services of investment banking advisory firm Sherman & Company of New York to assist with this offer.

Of course Ebix reserves the right to reduce the offer if it does not receive a positive engagement response in a timely manner or if Patriot National takes any steps that could have an adverse impact on its value.

 

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