Ebix, Inc., a developer and supplier of software and e-commerce solutions to the insurance industry, has signed an agreement to acquire Finetre Corporation through a merger. The closing is expected to occur on Oct. 2. Finetre is an ASP software technology firm focusing on transaction processing and compliance automation in the financial services industry. The acquisition gives Ebix an annuity exchange, AnnuityNet, which services approximately $15 billion in annuity premiums each year over the Internet, and adds to Ebix's position as an exchange for life insurance sales illustrations through its EbixLife subsidiary.

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

Ebix also announced in the future it intends to merge Finetre with its wholly owned subsidiary EbixLife, creating a combined entity that will increase operating efficiency at both companies. The integration is expected to spark expansion into new product lines, including life insurance transaction processing, since the combined company will benefit from access to Ebix's development resources and the larger customer footprint of the combined entity. After the merger is complete, EbixLife will serve 48 insurers and hundreds of distributors, offering a complete suite of sales support, transaction processing, and back-office automation products and services.