First American to Acquire Strategic’s Real Estate Arm

First American Financial Corp. said Thursday that it has agreed to buy all the real estate services operations of Strategic Mortgage Services Inc. except for its flood zone certification business.

Terms of the transaction weren’t disclosed. There will be some layoffs, but most employees will be retained, said Thomas A. Klemens, First American’s chief financial officer. Job cuts won’t be determined, he said, until after the acquisition.

Joseph R. Reppert, chairman of SMS in Irvine, is expected to take a marketing position at the Santa Ana title carrier, Klemens said.

First American, the nation’s largest title insurer, has long been expanding into other real estate-related fields, including property tax monitoring, credit reporting, flood certification, appraisal services and home warranty policies.

SMS, with 820 employees nationwide and $80 million in revenue last year, provides much of the same services. It is the nation’s third largest provider of mortgage credit information and holds a controlling interest in the nation’s largest mortgage document preparation firm. It also handles appraisal, title, closing and escrow services.

SMS would be the ninth acquisition for First American since January 1995 and would rank the title insurer first or second in seven core business, John Long, chief executive of the company’s real estate services subsidiary, said in a press release. The unit, First American Real Estate Information Services Inc., will absorb most SMS operations.

SMS plans to sell its remaining flood zone certification division to another company, Klemens said. First American already has such a company, which controls half the market, he said.

He said First American hopes to complete the deal in the next few weeks.