Cannae Holdings and Senator Investment Group, an investment firm and hedge fund, respectively, have made an unsolicited all-cash offer to acquire property analytics company CoreLogic (NASDAQ: CLGX), with successful financial sector investor Bill Foley leading the charge. Here's a rundown of what CoreLogic does, why these firms and Foley might want to acquire the company, and what investors need to know about the proposed acquisition.
What is Corelogic?
CoreLogic is a data analytics company that focuses on the real estate and insurance industries. The company operates a data and analytics business that provides a variety of analytical services for clients, such as multiple listing technology and platforms, property information and analytics, rental screening, and more. The company also provides a range of data services for mortgage lenders, such as flood data, property tax services, and underwriting and workflow solutions.
CoreLogic has more than 4.5 billion property records in its database dating back to over 50 years. It refreshes data daily, covers more than 99.9% of U.S. property records, and its solutions are used by more than 1.2 million real estate professionals, 9,000 mortgage lenders, and over 4,500 property management companies. In a nutshell, CoreLogic is the industry leader in property-level data and analytical insight.
Who is Bill Foley and why does he want to buy Corelogic?
Leading the acquisition efforts for Cannae and the other investors is Bill Foley. In the press release announcing the acquisition offer, Foley is referred to as "a uniquely qualified buyer who will strengthen the business for all constituencies and is offering full value to current shareholders."
Foley has a long history of profitable acquisitions, particularly in the insurance industry. Foley led an acquisition of then-small Fidelity National Title Insurance Company in 1980 and as Chairman and CEO of the business led the company's 1987 IPO and its growth into the market leader within title insurance by 2000 after a series of savvy acquisitions. Foley is considered to be a master at creating value through acquisitions, and it's tough to argue with his track record.
What does it mean to investors?
Cannae and Senator Investment Group's offer is an all-cash offer to buy CoreLogic for $65 per share -- a price that values CoreLogic at about $7 billion including debt. So if the deal were to be accepted and completed as offered, investors would receive $65 for every CoreLogic share they own. This is a 34% premium to CoreLogic's average stock price over the 30 days prior to the offer.
It's also worth noting that the proposed acquirers already own a substantial 15% interest in the common stock of CoreLogic so they would only need to pay $65 per share for the stock they don't already own.
For the time being, CoreLogic isn't saying too much about the offer. The company has advised shareholders to take no action yet and says its board would review the proposal.
Here's one interesting thing to note. Upon the announcement of the buyout offer, CoreLogic shares soared, as would be expected. However, they quickly rose beyond the proposed buyout price. As of June 30, CoreLogic shares are trading for more than $68 per share. When this happens, it indicates that investors are expecting the buyout price to ultimately increase -- maybe there will be a bidding war, or maybe the company will simply ask Cannae and Senator to increase their bid.
The bottom line is that this is still a very fluid situation, and investors should keep an eye out for additional news regarding Cannae's offer in the weeks ahead.