Stewart Information Services Corp 8-K, filed Sep 1, 2020
Stewart Information Services Corp (STC)
About this 8-K
Stewart Information Services Corp filed this 8-K on September 1, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
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| ITEM 1.01. | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. |
On September 1, 2020, Stewart Title Company (“STC”), a wholly-owned subsidiary of Stewart Information Services Corporation (the “Company”), entered into an asset purchase and sale agreement (the “Purchase Agreement”) with Unified Title Company, LLC (“Unified”), Unified Title Company of Northern Colorado, LLC (“Unified NC”), Legacy Title Group, LLC (“Legacy”), Empire West Title Agency, LLC (“Empire West”), Western Title Company, LLC (“Western”), Colorado Escrow and Title Services, LLC (“Colorado Escrow”), Empire Title of Colorado Springs, LLC (“Empire CS”), Western Exchange Services, LLC (“Western Exchange”), El Paso Title Plant, LLC (“El Paso”), and ET Production Services, LLC (“ET Productions” and collectively with Unified, Unified NC, Legacy, Empire West, Western, Colorado Escrow, Empire CS, El Paso, and Western Exchange, the “Selling Companies”), ET Investments, LLC, a Wyoming limited liability company (“ET WY”), and ET Investments, LLC, a Colorado limited liability company (“ET CO”), and John P. Dwyer Jr. (“Dwyer”) and Bryan R. Willis (“Willis”) with respect to the non-solicitation and non-compete covenants contained therein. Pursuant to the Purchase Agreement, STC acquired 57 title offices with operations in the States of Arizona, Colorado, and Nevada from the Selling Companies for a purchase price of $105 million in cash and the assumption of certain liabilities. The closing of the transaction occurred simultaneously with the execution and delivery of the Purchase Agreement.
The Purchase Agreement contains customary representations and warranties of the Selling Companies, on the one hand, and STC, on the other hand. Under the Purchase Agreement, the Selling Companies, ET CO, and ET WY agreed to indemnify STC for any breaches of representations or warranties of the Selling Companies contained in the Purchase Agreement, losses associated with retained liabilities, which include the pre-closing operations of the business, and fraud or gross and willful misrepresentation of the Selling Companies. STC similarly agreed to indemnify the Selling Companies for any breaches of representations or warranties of STC in the Purchase Agreement, losses associated with the assumed liabilities, and fraud or gross and willful misrepresentation of STC.
In addition, the Purchase Agreement includes customary covenants for a transaction of this sort, including a three-year non-solicitation covenant of the Selling Companies, ET CO, ET WY, Dwyer and Willis with respect to certain employees of the Selling Companies and a three-year agreement not to participate in, open, own, direct, work for, run or otherwise compete with STC in the title insurance, escrow, closing and settlement services business in certain counties in which the Selling Companies operated.
Concurrent with the closing of the Purchase Agreement, STC and the Selling Companies entered into a Transition Services Agreement providing for the Selling Companies’ post-closing management of certain business operations for the benefit of STC and the orderly transition of the purchased assets and business operations to STC for a period that will allow the parties to smoothly transition the business operations.
There is no material relationship which exists between any of the Selling Companies, ET CO, ET WY, Dwyer or Willis and STC or its affiliates other than in respect of the Purchase Agreement.
| ITEM 8.01. | OTHER EVENTS. |
On September 1, 2020, the Company issued a press release announcing the acquisition of 57 title offices in the states of Arizona, Colorado and Nevada. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
| (d) | EXHIBITS |
| Exhibit No. | Description |
| 99.1 | Press release of Stewart Information Services Corporation September 1, 2020 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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STEWART INFORMATION SERVICES CORPORATION (Registrant) | |||
| By: | /s/ David C. Hisey | ||
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(David C. Hisey, Chief Financial Officer, Secretary and Treasurer) |
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| Date: September 1, 2020 | |||
Exhibit 99.1
NEWS RELEASE
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STEWART INFORMATION SERVICES CORP. P.O. Box 2029 Houston, Texas 77252-2029 |
CONTACT John Chattaway, Stewart Media Relations (713) 625-8180; mediarelations@stewart.com |
Stewart Announces the Acquisition of a Significant Number of Western U.S.
Operations from ET Investments
Acquisition Strengthens Stewart’s Presence in Arizona, Colorado and Nevada
HOUSTON (September 1, 2020) – Stewart Information Services Corporation today announced the acquisition of 57 title offices in the states of Arizona, Colorado and Nevada from ET Investments. The purchase price was $105 million, and Stewart expects the deal to be immediately accretive to the company’s August equity raise of more than $100 million. Historically, the title offices associated with this transaction have generated in excess of $20 million in pre-tax income.
“This acquisition reflects the ideal type of core title transaction Stewart is looking to undertake as we improve scale and competitive position in priority markets, add proven industry talent and strengthen our customer and business relationships,” commented Fred Eppinger, Stewart Chief Executive Officer. “ET Investments has been a great partner in this process, with Stewart looking to leverage ET’s well-respected customer experience to further enhance the Stewart brand in the western U.S. and build upon the structural changes taking place at Stewart today.”
“The purchase of these title operations marks a new day at Stewart in realigning our company to compete in several strategically strong markets where the company has traditionally been underrepresented,” noted Stewart Group President Steve Lessack. “We are only at the beginning of meaningful change at Stewart in which targeted investments in markets and people will drive greater brand awareness and customer loyalty.”
About Stewart
Stewart (NYSE-STC) is a global real estate services company, offering products and services through our direct operations, network
of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement
services to specialized offerings for the mortgage industry, we offer the comprehensive service, deep expertise and solutions our
customers need for any real estate transaction. At Stewart, we are dedicated to becoming the premier title services company and
we are committed to doing so by partnering with our customers to create mutual success. Learn more at stewart.com.
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