The First American Corporation Announces Plan to Separate Its Financial Services and Information Solutions Companies
|January 15, 2008|
SANTA ANA, Calif.,-- The board of directors of First American Corporation ("First American") has approved a plan to spin-off its Financial Services companies, consisting primarily of its Title Insurance and Specialty Insurance reporting segments, into a separate public company to be called First American Financial Corporation. The Information Solutions company, which will consist primarily of the current Property Information and Mortgage Information segments, as well as First American's 75 percent interest in First Advantage Corporation , will remain at the existing holding company, which will be renamed prior to the separation. The transaction, which the company anticipates will be tax-free to shareholders, is expected to close in the third quarter.
"Over the last two decades we have built the preeminent real estate information and title insurance businesses," stated Parker S. Kennedy, chairman and chief executive officer of First American. "We believe that this transaction will unlock the unrealized value of our information businesses, while strengthening the competitive positions of both companies. After the separation, each company will have the financial strength and flexibility to implement its own unique growth strategies, allowing both organizations to refine and refocus their business mix. Because each company will have its own separate results and its own publicly traded stock, each company will also be in a better position to raise capital and align management and employee incentives with the interests of shareholders."
The Financial Services company is expected to pay the same aggregate dividend as that currently paid by the company, and the Information Solutions company is not expected to pay a dividend.
The transaction is subject to customary conditions, including final approval by First American's board of directors, filing and effectiveness of a Form 10 Registration Statement with the Securities and Exchange Commission, receipt of a tax ruling from the IRS and the approval of applicable regulatory authorities.
Once the transaction is complete, First American shareholders will own 100 percent of the common equity in both the Financial Services and the Information Solutions companies. Both companies are expected to trade on the New York Stock Exchange, with the Financial Services company expected to trade under the current ticker symbol "FAF."
Information Solutions Company
The Information Solutions company is a leading provider of a wide range of data and analytics products and solutions. The company provides outsource solutions with leading market shares in mortgage risk analytics; property, credit and employment information; as well as a number of other businesses.
To better align its businesses to its customer base, the Information Solutions company's operations will be organized into four reporting groups:
Source: First American