Fidelity National Building a Reputation
Two headline-grabbing hostile takeover bids for companies outside its core business have given Fidelity National Financial Inc. a high profile, especially for a company in the staid world of title insurance.
But the Irvine title underwriter, which provides protection to home buyers and lenders from prior liens on property, also continues to build its basic business through friendly acquisitions and other transactions.
Earlier this week, it completed its acquisition of Nations Title Inc. in Kansas in a $22-million deal that makes Fidelity the nation’s fourth-largest title insurer. And on Thursday, it paid $566,667 for 17% of a home warranty company, National Alliance Marketing Group Inc., and the right to convert a $1.2-million loan into an additional 14% stake. National Alliance insures home buyers against such potential new-home problems as defects in electrical wiring or water heaters.
The stake in the small company gives Fidelity a chance to offer one more product to home buyers at escrow closings. Like other title insurers, Fidelity is trying to build a stable of products that could be sold to lenders and buyers.
Fidelity will have to expand Alliance’s operations greatly beyond its current “embryonic” stage, said Carl Strunk, Fidelity’s chief financial officer. “This could be very good for us,” he said, “and we found a company that doesn’t cost a hundred jillion dollars to buy.”
Two years ago, Fidelity mounted what turned out to be an 18-month effort to acquire US Facilities Corp., a Costa Mesa medical and casualty insurer. It failed, but Fidelity made a profit in selling the stock last fall. Now it is embroiled in an effort to take over Giant Group Ltd., a Beverly Hills company that owns a majority stake in the Rally’s hamburger chain. Fidelity, its top executives and fellow investors also are major shareholders in the company that owns the Carl’s Jr. restaurant chain.
James S. Granelli covers financial institutions and fraud issues for The Times. He can be reached at (714) 966-5810 and at james.granelli@latimes.com.
