eBenX, Inc. to Merge with SHPS, Inc.
The combination will create the market's leading comprehensive HR/benefits administration and health management services company. The merged company will operate under the name SHPS, be headquartered in Louisville, Kentucky, and be led by David Garner, chief executive officer of SHPS.
The transaction provides for the eBenX shareholders to tender their common stock in return for $4.85 per share of cash. The transaction is expected to close in the first quarter of 2003, subject to regulatory and shareholder approval.
"This is an excellent strategic transaction, creating a great new company," said John J. Davis, president and chief executive officer of eBenX. "The complementary service offerings and technologies of our two companies will result in significant market benefits both for existing customers, and purchasers and suppliers of employee benefits and health care in general. In return for creating that company, we believe our shareholders are receiving significant value versus the recent trading price of eBenX."
David E. Garner, president and chief executive officer of SHPS, commented: "We approached eBenX with the idea of this combination because they have great technology, a great customer list, and talented employees. The merged company will be a strategic and operational combination born of the strength of the two companies. By combining our two companies, we believe we can deliver a significantly better set of products and services than either company could achieve individually. I believe that the combined technology platforms and service offerings are unmatched in the marketplace and position the combined company as the clear leader in our space."
Following the closing of this transaction, SHPS will provide benefit administration and total population-based healthcare management services for approximately 20 million covered lives and over 800 customers in both the large and mid-size employer market.
The merger will be effected as a purchase accounting transaction and is subject to certain closing conditions, including regulatory approvals and the approval of eBenX shareholders. Banc of America Securities has delivered a fairness opinion to eBenX.