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Shareholders OK Fidelity offer to buy out LPS

By Mark Basch, Contributing Writer

Shareholders of Lender Processing Services Inc. approved the company's buyout offer from Fidelity National Financial Inc. at a special meeting Thursday, clearing the way to close the deal early in 2014.

LPS President and Chief Executive Officer Hugh Harris said after the brief meeting that the two Jacksonville-based companies have a target date of Jan. 3 to complete the merger, but they are awaiting some regulatory approvals.

"There are some approvals we haven't received yet, but we're expecting those in the next few days," Harris said.

Fidelity and LPS agreed to the buyout in May. After some revisions to the original agreement, the deal now calls for LPS stockholders to receive $28.102 in cash and approximately one share of Fidelity stock for every LPS share they own. However, the amount of Fidelity shares that will be issued to LPS stockholders is subject to adjustment, based on Fidelity's share price in the days leading up to completion.

Under the buyout plan, LPS' operations will be merged with a Fidelity subsidiary called ServiceLink into a new company called Black Knight Financial Services Inc. Investment firm Thomas H. Lee Partners L.P. will then buy 35 percent of Black Knight, with Fidelity retaining the other 65 percent.

Fidelity previously owned LPS, which provides processing services for mortgage banking firms. Fidelity bought the business from Alltel Corp. in 2003 and then moved its corporate headquarters from California to the processing business' offices on Riverside Avenue in Jacksonville.

Fidelity and LPS are still headquartered in that same office complex, along with Fidelity National Information Services Inc., or FIS.

FIS, which provides technology services for banks, was spun off from Fidelity National Financial as a separate public company in 2006. FIS then spun off LPS as a separate company in 2008.

Fidelity National Financial is the biggest of the three public companies, with about 60,000 total workers, but LPS has the most Jacksonville employees.

At the time of the original merger agreement, LPS had total employment of 7,538, with 2,656 in Jacksonville.

Fidelity had about 800 Jacksonville employees.

FIS employed a total of 38,000, with 400 in Jacksonville.

Harris said Thursday that he does not know what will happen to the LPS employees after the buyout is completed.

"That's probably going to have to be Fidelity's call," he said.

However, he said he expects Fidelity to keep most of the LPS operation intact.

Harris himself expects to "hang around" for a while after the merger, but said he will not be staying with the company long term.

mbasch@baileypub.com

(904) 356-2466

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