Fidelity National Financial, Inc. in Jacksonville, Fla., a provider of products and outsourced services for financial institutions and the mortgage, insurance and real estate industries, is buying Sedgwick CMS Holdings, Inc., an insurance claims management services firm.
The purchase price of $635 million, subject to certain adjustments, is expected to be funded through a combination of cash on hand and borrowings under existing lines of credit. Subject to regulatory approvals, the transaction is expected to close on January 31, 2006.
Sedgwick CMS designs and manages outsourced third party administration programs for workers’ compensation claims management, liability claims management and disability claims management. The company’s services include claims administration, managed care and related services to clients with high frequency, low severity claim exposures.
With expected 2005 revenue of nearly $400 million, Sedgwick CMS says it is one of the country’s largest providers of claims administration services and has more than 400 clients under multi-year contracts in a wide range of industries, including 25 of the Fortune 100 and 72 of the Fortune 500.
“Sedgwick CMS provides FNF a very exciting opportunity in an attractive, growing market, while allowing us to leverage our core expertise in title insurance processing and financial transaction processing,” said Chairman and Chief Executive Officer William P. Foley, II. “Studies have shown the domestic market for third party administration services for just the Fortune 500 to be in excess of $2.5 billion. The long-term nature of the customer contracts and the strength of the customer relationships are very appealing and will provide growing, predictable and consistent revenue and earnings for our shareholders. In addition, we are excited about the opportunity to cross-sell Sedgwick CMS’s outsourced claims administration services to FNF’s existing customer relationships. We believe that the acquisition of Sedgwick CMS will further our continued goal of maximizing the value of our assets for the benefit of our shareholders.”
More information can be found at www.fnf.com, www.fntg.com and www.fidelityinfoservices.com.
Source: Fidelity National Financial, Inc.