Stewart Title Bought Out In Billion-Dollar Deal
Houston-based Stewart Information Services Corp. has agreed to be acquired by Florida-based Fidelity National Financial, a provider of title insurance and transaction services to the real estate and mortgage industries.
The deal is valued at $1.2B, a 23% premium to Stewart’s closing stock price last week.
Stewart has been searching for strategic alternatives after a difficult year. Stewart saw both revenue and net income drop in Q3, including a $4M hit to pretax profits attributed to the recent hurricanes. Total revenue and total operating revenue both declined about 9% year over year.
The agreement with Fidelity, unanimously approved by Stewart’s board of directors, will give Stewart shareholders $25 in cash and 0.6425 common shares of Fidelity for each share of Stewart common stock they hold at closing. Based on Fidelity’s closing stock price last week, the merger consideration represents total value per Stewart share of $50.20.
“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,” Stewart Chairman of the Board Thomas Apel said in a press release.
Citi acted as financial adviser to Stewart and Davis Polk & Wardwell LLP acted as Stewart’s legal adviser.