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Fidelity National Financial dominates mortgage underwriting. Its former LPS unit is the top mortgage servicer. The question is whether two companies that have run out of room to grow separately can prosper together.
May 23 -
Mortgage processor Lender Processing Services is reportedly in talks to be acquired by title insurer Fidelity National Financial and private equity firm Thomas H. Lee Partners in a $2.9 billion deal.
May 22 -
Lender Processing Services (LPS) has agreed to pay $14 million to settle claims the company deceived investors about its business practices.
May 14
Fidelity National Financial (FNF) announced Tuesday that it acquired Lender Processing Services (LPS),
The purchase creates a new source of new business for title insurer FNF as the
FNF said it will buy all of LPS's outstanding common stock for $33.25 per common share. The two companies have set a target of $100 million in cost synergies, said FNF Chairman William P. Foley, II, in a press release.
"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," he said in the release. "We believe there are meaningful synergies that can be generated through the similar businesses in centralized refinance and default related products, elimination of some corporate and public company costs and the shared corporate campus."
The agreement includes a "go-shop" period for LPS that will last until July 7, so that the company can actively solicit acquisition proposals from other potential buyers.
After the deal closes, FNF said it will combine LPS with its ServiceLink business in a new subsidiary - selling a 19 percent stake in the company to private equity firm Thomas H. Lee Partners, L.P. for roughly $381 million.
LPS was spun off from Fidelity National Information Services (FIS) in 2008. Fidelity National Financial owns a stake in FIS.
