Fidelity National Financial Agrees to Acquire LPS in $2.9B Deal

Fidelity National Financial announced Tuesday that it acquired Lender Processing Services, confirming rumors that the two had been making plans to make a deal worth $2.9 billion.

The purchase creates a new source of new business for title insurer FNF as the market demand for bundled technology and services is growing across the mortgage industry.

FNF said it will buy all of Lender Processing Services’ outstanding common stock for $33.25 per common share. The two companies have set a target of $100 million in cost synergies, said FNF chairman William P. Foley II in a press release.

"This combination will create a larger, broader, more diversified and recurring revenue base for FNF and makes us the nation's leading title insurance, mortgage technology and mortgage services provider," he said in the release.

"We believe there are meaningful synergies that can be generated through the similar businesses in centralized refinance and default related products, elimination of some corporate and public company costs and the shared corporate campus."

The agreement includes a "go-shop" period for LPS that will last until July 7, so that the company can actively solicit acquisition proposals from other potential buyers.

After the deal closes, FNF said it will combine LPS with its ServiceLink business in a new subsidiary—selling a 19% stake in the company to private equity firm Thomas H. Lee Partners L.P. for roughly $381 million.

LPS was spun off from Fidelity National Information Services in 2008. Fidelity National Financial owns a stake in FIS.