First Advantage Corporation Acquires The credit Information Group Of First American
|September 15, 2005|
ST. PETERSBURG, Fla., -- First Advantage Corporation (NASDAQ: FADV) and The First American Corporation (NYSE: FAF) jointly announced that First Advantage, a global risk mitigation and business solutions provider, has acquired the Credit Information Group (CIG) of The First American Corporation, the nation’s largest data provider and First Advantage’s largest shareholder, in an all-stock transaction.
First American and First Advantage originally announced the letter of intent for the transaction on March 22, 2005, and announced the signing of the definitive agreement on May 25, 2005. The transaction was approved by a majority of common shareholders and disinterested Class A shareholders voting by proxy or in person at the company’s annual shareholder meeting held on Sept. 13, 2005.
John Long, chief executive officer of First Advantage Corporation stated: “We are very pleased that the FADV shareholders voted in favor of this transaction as the acquisition of CIG immediately adds significant scale and depth of leadership to our business. We will continue to aggressively advance our growth strategy, and I am confident that First Advantage will emerge as a solid leader in the business information marketplace.”
Parker S. Kennedy, chairman and chief executive officer of The First American Corporation and chairman of First Advantage Corporation said: “With the completion of this transaction, our two companies will each have a distinct focus—First American will continue as the leading provider of real estate information, and First Advantage will provide business information and related services. Together, our companies will form the largest data provider in the United States. We anticipate that this clarity will, among other things, enable investors to more accurately assess the value of the stock of our respective companies.”
Under the terms of the definitive agreement, The First American Corporation and its First American Real Estate Solutions (FARES) joint venture contributed their mortgage, automotive, consumer and sub-prime credit businesses to First Advantage in exchange for 29,073,170 shares of First Advantage Class B common stock, valued at approximately $596 million, based upon the agreed upon stock price of $20.50 per share. First Advantage also issued 975,610 Class B shares to First American in a $20 million debt-to-equity conversion.
As a result of the transaction, First American has increased its ownership interest in First Advantage from its previous position of 67 percent to approximately 80 percent.
Anand Nallathambi, president of First American’s Credit Information Group, has assumed the responsibility of president of First Advantage Corporation and reports to John Long, chief executive officer.
With the closing of the CIG transaction and the inclusion of its operating results, First Advantage expects the company’s diluted earnings per share will be in the range of $0.30 to $0.32 for the quarter ending Sept. 30, 2005.
Source: The First American Corporation