trending Market Intelligence /marketintelligence/en/news-insights/trending/95yunnpmmzmm_u3qgmhslq2 content esgSubNav
In This List

Fidelity National to acquire Stewart Information Services in cash-and-stock deal


Insurance Underwriting Transformed How Insurers Can Harness Probability of Default Models for Smarter Credit Decisions


The World's Largest P&C Insurers, 2023


The Worlds Largest Life Insurers, 2023


Essential IR Insights Newsletter Fall - 2023

Fidelity National to acquire Stewart Information Services in cash-and-stock deal

Fidelity National Financial Inc. has agreed to acquire Stewart Information Services Corp. for $50.00 per common share, subject to potential adjustment, representing an equity value of approximately $1.2 billion.

The consideration will be paid 50% in cash and 50% in Fidelity common stock.

Stewart stockholders will also have the option to elect to receive their consideration in all cash or all stock, subject to pro rata reductions to the extent the cash or stock option is oversubscribed. For those Stewart stockholders who elect to receive all Fidelity stock, the exchange ratio will be equal to 1.2850, subject to potential adjustment and proration to the extent the stock option is oversubscribed.

Under the terms, if the combined company is required to divest assets or businesses for which revenues exceed $75 million up to a cap of $225 million in order to receive required regulatory approvals, the purchase price will be adjusted down on a pro rata basis to a minimum purchase price of $45.50 per common share.

Fidelity National currently intends to fund the deal through a combination of cash on hand, debt financing and the issuance of its common stock to Stewart stockholders. Including the assumption of $109 million of Stewart debt, pro forma debt to total capital is expected to be no more than approximately 20% at the close of the transaction.

The closing of the transaction is subject to certain closing conditions, including Stewart stockholder approval, federal and state regulatory approvals and the satisfaction of other customary closing conditions. The deal is expected to close in the first or second quarter of 2019.

If the deal is not completed for failure to obtain the required regulatory approvals, Fidelity is required to pay a reverse breakup fee of $50 million to Stewart.

Fidelity intends to achieve at least $135 million in operational cost synergies and expects the acquisition to be at least 15% accretive to pro forma 2017 adjusted net earnings per share at that operational cost synergy target.

Citi acted as financial adviser to Stewart and Davis Polk & Wardwell LLP acted as Stewart's legal adviser.