Fidelity National Financial Inc., the largest U.S. title insurer, agreed to acquire its former unit, Lender Processing Services Inc., to expand in the business of providing and analyzing mortgage data.
The cash-and-stock deals values LPS at $33.25 per common share, or about $2.9 billion, Jacksonville, Florida-based Fidelity National said today in a statement. LPS, also based in Jacksonville, closed at $29.11 on May 22, before it was first reported that Fidelity National was in talks to acquire the firm.
Fidelity National is expanding in housing-linked businesses amid a recovery in the U.S. real estate market. LPS has technology that's used by lenders throughout the mortgage process, from origination to foreclosure.
"This combination will create a larger, broader, more diversified and recurring revenue base for FNF and makes us the nation's leading title insurance, mortgage technology and mortgage services provider," Fidelity National Chairman William Foley said in the statement. "There are meaningful synergies that can be generated."
The transaction will boost earnings by 11 percent compared with 2012, Foley said. After the deal is completed, Fidelity National will combine its ServiceLink unit with LPS in a new holding company and sell a 19 percent stake in that business to Thomas H. Lee Partners for $381 million, according to the statement.
Bank of America Corp. and JPMorgan Chase & Co. were financial advisers on the deal and provided committed financing to Fidelity National. LPS's bankers were Credit Suisse Group AG and Goldman Sachs Group Inc.