Battle for Orange County’s CoreLogic Leads to Private Equity Takeover

February 8, 2021 Updated: February 8, 2021

Commentary

Irvine-based CoreLogic Inc. (NYSE: CLGX) is being purchased by two private equity funds for about $7.7 billion, a figure that includes about $6 billion—or $80 per share—buyout for current stakeholders.

The purchase price also includes $1.7 billion in debt owed by CoreLogic. The acquisition will be funded with $2.5 billion already invested in the private equity funds and up to $5.5 billion in debt.

The deal was clearly designed to complete current acquisition activity by the board of directors.

CoreLogic has been in play since an investor group led by businessman Bill Foley made an unsolicited offer to buy CoreLogic last June for $7 billion (including a cash offer to buy out the then-shareholders for $5.2 billion plus the debt then-outstanding). Foley’s investment company owns a major stake in local title insurance company Fidelity National Financial (NYSE: FNF), among other holdings.

Last July, soon after it received the group’s unsolicited offer, CoreLogic adopted a “poison pill,” giving each shareholder the right to buy additional shares.

Thus, even though Foley’s investment coalition owned 15 percent of CoreLogic at the time of its attempt to buy the company, the “poison pill” meant the offer was unlikely to be accepted.

Seven months later, CoreLogic has found a new buyer—for an additional $1 billion for its current shareholders.

CoreLogic chief executive Frank Martell said he was looking forward to working with the company’s new investors.

“Stone Point and Insight Partners are highly respected investors who recognize the value and potential of CoreLogic’s digital content, solutions and market-leading platforms that power the housing economy,” Martell said in a press release. “We look forward to working closely with Stone Point and Insight to build on our record financial and operating performance and accelerate our digital transformation and growth.”

The private equity funds buying CoreLogic are managed by Stone Point Capital Partners of Greenwich, Conn., and Insight Partners of New York City.

Stone Point Capital chief executive Chuck Davis said in a press release that he hoped the acquisition would help his private equity firm grow.

“CoreLogic is a mission critical vendor and data provider across industry sectors in which Stone Point has specialized over the past 20 years, including mortgage, residential real estate and [property and casualty] insurance,” Davis said in a press release. “CoreLogic’s proprietary data assets are increasingly important to its customers, and we look forward to leveraging our network within the broader financial services industry to support the company’s next phase of growth.”

Insight Partners managing director Deven Parekh sounded equally optimistic.

“What we found in CoreLogic is a market leader with a long history of serving customers with powerful data technology and a future vision to innovate across the real estate ecosystem,” Parekh said in a press release.

“We are excited to support CoreLogic in its next chapter of transformational growth. At Insight Partners we focus on partnering with clear technology leaders that define and transform their markets through world-class software and data.”

The transaction is subject to review by regulators and also approval by current CoreLogic shareholders, but the principals expect approval by all such parties. CoreLogic Inc. passed other resolutions such that the “poison pill” adopted last July will expire immediately before the transaction consummates.

The deal is expected to close by August.

Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.