A title insurance giant that has been a fixture on the American real estate landscape since the 1800s has agreed to be acquired by a larger peer.
Maco Stewart, along with legislator William H. Stewart and other family members,
purchased the Gulf City Abstract Co. in 1893.
The firm, which was located in Galveston, Texas, was the beginning of Stewart Title Co., now operating from Houston and claiming the No. 3 spot among title companies.
Stewart is among a family of companies owned by Houston-based Stewart Information Services Corp.
Matt Morris, who is the chief executive officer, is “the fifth generation of William H. Stewart’s descendants to head the company,” its website states.
Stewart reports that it has grown into
a global real estate services company. Its products and services reportedly include residential and commercial title insurance, closing and settlement services, and specialized mortgage industry offerings.
On Monday, an announcement from Stewart Information said it has agreed to be acquired by rival Fidelity National Financial Inc.
Stewart Chairman Thomas G. Apel noted in the announcement that following an analysis of its strategic alternatives last year, “We determined that capitalizing on the Fidelity platform will best enable us to support the Stewart brand and continue providing the service our customers have come to expect.”
Fidelity Chairman
William P. Foley II called Stewart “one of the most respected names” in the business.
“The venerable Stewart brand has a long and respected history in the title insurance industry, and we see tremendous potential in working with the Stewart management team to invest in and grow the Stewart brand on a national basis as part of our long-time, successful strategy of operating multiple title insurance brands under the FNF umbrella,” Foley said.
Jacksonville, Florida-based Fidelity was founded in 1847 and today claims to be the nation’s biggest title insurer.
Fidelity will pay $50 a share for Stewart’s common stock with some potential adjustments. The equity value of the deal is estimated at $1.2 billion — which Fidelity will fund through a combination of cash on hand, debt financing and the issuance of FNF common stock to Stewart stockholders.
Half of the purchase price will be in cash, and the other half will be in the newly issued Fidelity common stock, which trades on the NYSE under the symbol FNF and was up $2.40 to $41.62 near midday.
Shares of Stewart, traded under the symbol STC, were
up $3.645 to $44.365.
The terms of the transaction require Fidelity to pay a $50 million reverse break-up fee.
The deal is subject to shareholder and regulatory approvals and isn’t expected to close until the first half of next year.
