Fidelity National Financial Acquires Stewart Information Services

The nation’s largest title insurance company, Fidelity National Financial (FNF), announced that it has signed a merger agreement to acquire Stewart Information Services for ~$1.2B. FNF intends to achieve at least $135M in operational cost synergies and expects the acquisition to be at least 15% accretive to pro forma 2017 adjusted net earnings per share at that operational cost synergy target. Houston-based Stewart is one of the leading title insurance companies in the country, providing residential and commercial title insurance, closing and settlement services, appraisal and valuation services and other offerings to the real estate industry.

“We are excited to welcome Stewart, its employees and its customers to the FNF family. The venerable Stewart brand has a long and respected history in the title insurance industry and we see tremendous potential in working with the Stewart management team to invest in and grow the Stewart brand on a national basis as part of our long-time, successful strategy of operating multiple title insurance brands under the FNF umbrella” – FNF Chairman, William P. Foley, II.

“We are very familiar with Stewart in the marketplace and see multiple areas where we can assist and accelerate Stewart’s growth plans. We also believe there are significant operational efficiencies we can bring to bear by leveraging FNF’s shared services infrastructure that will provide meaningful long-term value creation opportunities for our shareholders” – FNF CEO, Raymond Quirk.

“Last year, our Board initiated a review of strategic alternatives for the company, and after an extensive process, we determined that capitalizing on the Fidelity platform will best enable us to support the Stewart brand and continue providing the service our customers have come to expect. Combining with Fidelity National Financial will create a strong portfolio of customers and business relationships, and will provide us with the ability to grow the Stewart brand” – Stewart’s Chairman of the Board, Thomas G. Apel.

FNF currently intends to fund the $1.2B purchase price through a combination of cash on hand at FNF, debt financing and the issuance of FNF common stock to Stewart stockholders.  Including the assumption of $109 million of Stewart debt, pro forma debt to total capital is expected to be no more than approximately 20% at the close of the transaction.

The closing of the transaction is subject to certain closing conditions, including Stewart stockholder approval, federal and state regulatory approvals and the satisfaction of other customary closing conditions.  Closing is expected in the first or second quarter of 2019.