Fidelity National Financial explores strategic options
A sale of certain business units is possible
Fidelity National Financial (FNF), a firm known for offering title insurance and mortgage services through its portfolio of companies, said Tuesday it’s exploring the possible sale of some of the firm's businesses.
However, other options are also on the table — namely stock initiatives and spin-offs, the company said.
Nothing is final at this point, but the firm has hired J.P. Morgan Securities to help the company’s management team find strategic options for its portfolio of companies going forward.
FNF is not the only firm offering services to the mortgage industry that is exploring strategic options. The very nature of the industry today has forced firms to either find strategic partners for mergers or to announce sales and various efforts to consolidate.
FNF is still finalizing a deal it entered into to buy Lender Processing Services (LPS) earlier this year.
"Our energies are focused on the pending acquisition of Lender Processing Services and opportunities to grow our core businesses," said FNF chairman William Foley, II.
"Future free cash flow from core operations is expected to be used to pay down debt, invest in core operations, pay dividends and repurchase shares and not for acquisitions outside of our core business," he added. "The portfolio company investments have significant value which may not be fully reflected in our stock price and we believe there are attractive alternatives we can pursue to unlock the value of these investments for the benefit of FNF and our shareholders."
FNF writes title insurance through a series of insurance underwriters, Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title.
The company’s portfolio includes other non-mortgage related assets.
For example, FNF notes that it owns a 55% interest in restaurant owner and operator American Blue Ribbon Holdings. It also has a 51% stake in electronic component manufacturer Remy International.