Fidelity to Acquire Stewart for $1.2 Billion

March 19, 2018

Fidelity National Financial Inc. has signed an agreement to acquire Stewart Information Services Corp. for $1.2 billion. In a release, Fidelity said it will retain and grow the Stewart brand. The deal is subject to certain closing conditions, including Stewart stockholder approval, federal and state regulatory approvals and the satisfaction of other customer closing conditions. The deal is expected to close during the first or second quarter of 2019.

According to industry data, the Fidelity family of underwriters had 33.3 percent of the market share through the third quarter of 2017, while Stewart's underwriters had 10.6 percent. 

Fidelity intends to fund the purchase through a combination of cash, debt financing and FNF common stock and hopes to achieve at least $135 million in operational cost synergies.

“We are very familiar with Stewart in the marketplace and see multiple areas where we can assist and accelerate Stewart's growth plans,” said FNF CEO Raymond Quirk. “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.”

According to the companies, Fidelity plans to retain and grow the Stewart brand.

“I am extremely proud of Stewart’s legacy of high-quality underwriting and customer-focused service delivered by our loyal associates,” said Stewart CEO Matt Morris. “This transaction with Fidelity is an opportunity to continue building on this legacy, enhance innovation and create a more robust company for the future.”

After the Stewart's revenues declined from $2.1 billion in 2016 to $1.9 billion in 2017, the company's board of directors formed a strategic committee to review strategic alternatives. John Campbell, an analyst for the financial services firm Stephens, reported that many in the industry believed Fidelity was the third or fourth option to purchase Stewart.

Fidelity has a history of making significant acquisitions in the title space. In 2008, Fidelity acquired LandAmerica for $235 million. At the time, the combined companies represented 46 percent of the market. In 2000, Fidelity completed the $1.2 billion purchase of Chicago Title.

"We are excited to welcome Stewart, its employees and its customers to the FNF family," said FNF Chairman William P. Foley II. "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."

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