Minority Business Investment
During 2012, Ebix acquired a minority 19.8% interest in CurePet, Inc. ("CurePet") for cash consideration in the amount of $2.0 million. CurePet is a developmental-stage enterprise that has completed an insurance exchange that connects pet owners, referring veterinarians, animal hospitals, academic institutes, and suppliers of medical and general pet supplies, while providing a wide variety of services related to pet insurance to each constituent including practice management, electronic medical records, and billing. CurePet is also a customer of Ebix; during 2013 and 2012 the Company recognized $1.2 million and $1.5 million, respectfully, of revenue from CurePet, and as of December 31, 2013 and 2012 there were $1.4 million and $212 thousand, respectfully, of outstanding balances due from CurePet in the Company's reported trade accounts receivable. Ebix also has a revenue share arrangement with CurePet pertaining to certain customer revenues recognized by CurePet; for 2013, there have been no revenue sharing earned or accrued. The Company is accounting for its minority investment in CurePet using the cost method. The fair value of this investment as of December 31, 2013 was determined by an independent valuation expert using a combination of the income approach (discounted cash flow method) and market approach. Based on this independent evaluation it was concluded that the fair value of this minority business investment was greater than the Company's carrying value of the investment, and therefore the investment was not impaired as of December 31, 2013. As also disclosed in Note 21 "Subsequent Events," effective January 27, 2014 Ebix acquired the entire business of CurePet in an asset purchase agreement with the total purchase consideration being in the amount of $6.35 million of which $5.0 million pertains to a contingent earnout liability based on earned revenues over the subsequent thirty-six month period following the date of the acquisition.
