CoreLogic has hired Greenhill & Co. to evaluate the mortgage technology vendor's financial strategy and "explore a wide range of options aimed at enhancing shareholder value," up to and including a possible sale or merger.
Other actions on the table include cost savings initiatives, an evaluation of CoreLogic's capital structure, possible repurchases of debt and common stock or the potential disposition of business lines, the company said in a press release Monday, adding that the board of directors may not take any action after the review.
CoreLogic, of Santa Ana, Calif., was spun off from First American Corp. in June 2010. Since then, the company said it's streamlined its operations by shuttering its employer and litigation services businesses and selling off its offshore outsourcing business to Cognizant. In conjunction with the sale, CoreLogic entered into a five-year services agreement with Cognizant that will reduce CoreLogic's global workforce by 40%.
"While the company continues to make significant progress on these initiatives, in light of the challenging economic environment and current market conditions, the bBoard has determined to look more closely at a range of alternatives with the assistance of a financial advisor," CoreLogic said.
On Monday, Highfields Capital Management, which holds a 7.7% stake in CoreLogic and is its largest shareholder, called for the company's sale.
"We are pleased that the CoreLogic board has taken the important first step of initiating a formal process to explore alternatives to maximize shareholder value and we look forward to a prompt and thorough process," Highfields CEO Jonathan Jacobson said in a press statement. "As a long-standing shareholder, we are convinced that the best possible way to serve the interests of all shareholders is through a sale of the company to a strategic or financial buyer, of which we think there are many. We have made our views clear to the board and management, and will await the outcome with interest."
In March, CoreLogic purchased the mortgage technology vendor Dorado for $32 million, a company it previously held a 38% stake in. It is also the largest shareholder of Ellie Mae, holding a 16.29% stake in the mortgage technology vendor that completed its initial public stock offering in April.
In May, CoreLogic priced a $400 million debt offering to raise funds to repay a portion of outstanding debt from its existing credit facility.
In the course of the spinoff, First American acquired 12.9 million shares of CoreLogic stock valued at $18.76 per share. In April, CoreLogic paid $75.8 million to repurchase 4 million of those shares for $18.95 per share, reducing First American's stake in the company by 31%.
Under the terms of the spinoff, First American must divest itself of all its shares in CoreLogic no later than June 1, 2015 or pay additional taxes related to the spinoff.
CoreLogic's stock priced closed at $8.79 per share Monday, but was trading near $11 per share midday Tuesday.
CoreLogic posted net income of $31.48 million for the second quarter, an increase of nearly 29% from net income of $24.41 million in the same quarter of 2010. But the higher earnings were off lower revenue, $396.4 million in the second quarter, compared with $411 million a year earlier.
