Purchase of AIS Division to Help Fidelity Evolve, CEO Says

by Lance Turner  on Wednesday, Jan. 29, 2003 12:09 pm  

Fidelity National Financial Inc.'s $1 billion deal to buy Alltel Corp.'s financial services division will help Fidelity evolve into a diversified provider of products and services to the real estate and financial services industries, Fidelity's Chairman and CEO William Foley II said in a conference call Wednesday.

Fidelity, the nation's largest title insurance company, said it would acquire Alltel's mortgage servicing operations, retail banking operations, commercial lending and wholesale banking business, and community/regional bank division.

Alltel said that the telecom division of its Information Services subsidiary will not be part of the transaction.

The sale will affect about 5,500 Alltel employees.

Foley called the opportunity to generate growth through the integration of Fidelity products and services into Alltel's delivery platforms "compelling." He also said the acquisitions would help his company extend the range of its technology products and service to improve efficiency and lower customer costs.

Shares of Fidelity (NYSE: FNF) reacted favorably to the news, trading at $33.17 on Wednesday after closing at $32.51 on Tuesday.

Fidelity Earnings Beat Estimate

Also Wednesday, Fidelity announced fourth-quarter earnings per share results that — at $1.77 — beat the Thomson/First Call consensus estimate by 23 cents. That figure is also an increase of 82 cents over results from the same quarter last year.

Fidelity also reported fourth-quarter revenue of $1.6 billion, an increase over the $1.1 billion it reported during the same quarter last year. Net income reached $174.9 million, an increase over the $92.3 million it reported during the same quarter last year.

On Jan. 1, shares of Fidelity hit a new 52-week high, trading at $34.70. On Jan. 21, the company made a dividend payment of 12 cents.

A title insurance and diversified real estate-related services company, Fidelity's title insurance underwriters are Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title.

Fidelity provides title insurance in 49 states, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.

Fidelity also provides an array of escrow and other title-related services and real estate services, including collection and trust activities, trustee's sales guarantees, recordings, reconveyances, property appraisal services, credit reporting and others.



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