Fidelity National Financial officially announced the closing of the sale of an 85 percent interest in its personal lines business to an affiliate of WT Holdings Inc. for $119 million.
This sale was originally made public near the end of 2011.
“The sale of our personal lines business makes strategic sense for our company,” said Chairman William Foley II. “The personal lines business is regulated and carries higher earnings volatility than we are comfortable maintaining. We believe we can successfully redeploy this capital into non-regulated opportunities with higher growth and more consistent return potential, like the recent acquisition of O’Charley’s, thus creating greater value for our shareholders.”
Fidelity noted in its first quarter earnings that, combined with the recent flood business sale, FNF generated $254 million in cash and a $75 million, 8 percent seller note due in May 2013, as well as an $86 million after-tax gain from the two divestitures.
Fidelity had several updates on its non-title ventures during its first quarter investors’ call, with the mostly focus on its new restaurant ownership structure.
“After the merger [of O’Charley’s and American Blue Ribbon Holdings], FNF will have a total cash investment of approximately $120 million for 55 percent ownership in the [American Blue Ribbon Holding] restaurant company that will have approximately $1.25 billion in annual revenue, $65 million in current annual EBITDA and an expected additional $20 million in cost synergies,” Foley said.
The two and a half year plan for this new restaurant entity is to acquire a few other national chains that fit into this platform, creating a $2 billion restaurant company, and allow shareholders to invest directly in that company, while Fidelity maintains the majority ownership.