CoreLogic, a residential property information, analytics and services provider, has entered into a definitive agreement valued at $661 million with Decision Insight Information Group (DIIG).
In a transaction expected to close during the third quarter of 2013, CoreLogic will acquire three different units from DIIG: Marshall & Swift/Boeckh (MSB), a provider of residential and commercial property valuation solutions to the property and casualty insurance industry; DataQuick Information Systems, a property data and analytics information company; and the credit and flood services operations of DataQuick Lender Solutions.
"The acquisition of MSB and DataQuick significantly expands our footprint in property/casualty insurance and adds additional scale to our existing property data and analytics business,” said Anand Nallathambi, president and CEO of CoreLogic.
MSB provides building cost information, residential and commercial analytics solutions and business management services for property insurance companies, financial services organizations and the public sector. Using proprietary data, algorithms and platforms that leverage best-in-class replacement and repair cost estimates, analytics and other services, according to CoreLogic, MSB assists insurers in analyzing risk, underwriting property insurance coverage and estimating, managing and analyzing claims.
“The combination of MSB and our existing geo-spatial business capabilities and property-related data assets allows CoreLogic to provide our clients in the insurance industry with new and unique insights into underwriting property coverage as well as managing natural hazard risks and claims," said Nallathambi.
DataQuick Information Systems is a supplier of real estate data, analytics and business solutions to mortgage originators and servicers, investors, real estate professionals and the public sector. Employing a database of over 120 million U.S. residential properties, DataQuick provides customized analytical solutions, credit reporting, flood zone determination services, fraud monitoring, property valuation and automated decision software, CoreLogic said.
"In addition to the obvious financial benefits and cost synergies, the combination of CoreLogic, MSB and DataQuick should yield significant future growth opportunities through the introduction of new products, services and workflow tools which draw from a wide range of gold-standard data assets and analytical capabilities," said Nallathambi.
MSB operations and DataQuick's data licensing and analytics units will be reported within the Company's D&A segment. DataQuick's flood zone determination and credit servicing operations will be integrated into CoreLogic's Mortgage Origination Services segment.
"The acquisition of MSB and DataQuick is consistent with our strategic imperative of growing our D&A segment to over 50 percent of total CoreLogic revenues,” said CoreLogic CFO Frank Martell. “These assets are high-margin; subscription-based business models that generate free cash flow conversion rates above CoreLogic standalone. Our strong cash flow profile provides the financial flexibility to complete this acquisition and, at the same time, significantly increase the return of capital to our shareholders by expanding our 2013 repurchase program from 5 million to at least 8 million shares."
CoreLogic expects to realize cash tax benefits from certain acquired amortizable intellectual property, amortizable goodwill and net operating loss carry-forwards with an estimated present value of approximately $115 million. The acquisition is expected to be accretive to 2013 financial results excluding one-time reductions in acquired deferred revenue and other purchase accounting adjustments.
