Fidelity National Financial, Inc. recently announced the signing of a definitive agreement under which FNF will acquire all of the outstanding common stock of LPS for $33.25 per common share, for a total equity value of approximately $2.9 billion.
Under the terms of the definitive agreement, FNF will pay 50 percent of the consideration for the LPS shares of common stock in cash and 50 percent in shares of FNF common stock, subject to adjustment as described below. The purchase price represents a 19 percent and 25 percent premium, respectively, to the prior 30-day and 60-day average closing prices for LPS’ common stock through May 22, 2013, the last trading day before media reports regarding a potential transaction between FNF and LPS.
At closing, FNF will combine its ServiceLink business with LPS in a new consolidated holding company and sell a 19 percent minority equity interest in the new consolidated holding company to funds affiliated with Thomas H. Lee Partners, L.P. for approximately $381 million in cash. FNF will retain an 81 percent ownership interest in the new consolidated holding company.
Under the definitive agreement, FNF’s shares of common stock have been valued at $25.489 per share (the “Reference Price”), representing a fixed exchange ratio of 0.65224 shares of FNF common stock for each share of LPS common stock. Based on the Reference Price, FNF expects to issue approximately 57.4 million shares of FNF common stock to LPS common stockholders, representing approximately 20.151 percent of FNF’s pro-forma, fully diluted outstanding shares.