Title insurer Fidelity National Financial Inc. has sold its flood insurance operations to WRM America Holdings LLC.
Under the terms of the definitive agreement, WRM America of Uniondale, New York, will acquire 100 percent of the equity interests of Fidelity National Indemnity Insurance Co. and Fidelity National Insurance Services for approximately $210 million, consisting of approximately $122.5 million in cash, $75 million in a seller note and approximately a $12.5 million cash dividend that FNII intends to pay to FNF prior to closing.
The closing of the transaction is subject to regulatory approval and customary closing conditions and is expected during the fourth quarter of 2011. The sale is expected to result in approximately a $154 million pre-tax gain for FNF.
FNF Chairman William P. Foley II said the company has been the nation’s largest flood insurance provider and the business has been “very profitable and consistent” for nearly 10 years but the sale represented an opportunity to realize the value of the business and redeploy the capital into other uses.
FNF is a provider of title insurance, mortgage services, specialty insurance and diversified services.
WRM Holdings was formed in 2008 by Wright Risk Management, a risk financing and insurance management company, and Aquiline Capital Partners to serve the education market, with plans to grow into the not-for-profit and municipal markets nationally. Wright Risk Management manages the New York Schools Insurance Reciprocal and the New York Municipal Insurance Reciprocal.
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