Fidelity National Buys Sedgwick

Sedgwick CMS Holdings Inc. said it has signed a definitive agreement to be acquired by Fidelity National Financial Inc. for approximately $635 million.

No additional terms of the deal were released.

Sedgwick provides claims and productivity management solutions to large corporate and institutional clients. Its annual revenues for 2005 are expected to be $400 million.

The principal selling shareholders of the Memphis, Tenn.-based company are Marsh & McLennan Companies Inc., through its risk and insurance services firm Marsh Inc., and Trident II, L.P., a private equity fund managed by Stone Point Capital, LLC.

Fidelity National Financial (FNF), based in Jacksonville, Fla., provides products and outsourced services and solutions to financial institutions and the real estate industry. The company is a major underwriter of title insurance and provides processing of mortgage loan, related information products and outsourcing services to financial institutions, mortgage lenders and real estate professionals. It also provides specialty insurance products, including flood insurance, homeowners insurance and home warranty insurance.

Following the close of the transaction, announced yesterday, Sedgwick will become an FNF operating company. Sedgwick's David A. North, president and chief executive officer, will continue in his current role.

In an analyst's note, Standard & Poor's Rating Service said FNF's rating would not be affected by the sale. FNF's rating is "triple-B-minus" and is on credit watch positive.

S&P said the acquisition is in line with FNF's intent "to explore modest-sized acquisitions and continue the parent company's diversification plans."

FNF has consolidated revenues of $7.2 billion, with its title insurance arm accounting for 65 percent of the revenue.

S&P said the purchase is expected to be funded through a combination of cash on hand and borrowings under existing lines of credit. The deal is expected to close in January 2006, S&P added.