CoreLogic Buying DataQuick, Marshall & Swift Boeckh for $611M

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CoreLogic’s acquisition of Marshall & Swift/Boeckh and DataQuick Information Systems will help it meet the first of its “six pillars” to have the data and analytics business contribute more than 50% of the company’s revenue going forward, its executives said on a conference call to discuss the deal.

CoreLogic is paying $611 million in cash for MSB and DataQuick from Decision Insight Information Group, a unit of The TPG Group. The deal includes $115 million of net operating loss carryfowards. It should close in the third quarter.

It will use cash on hand as well as draw on a refinanced debt facility to pay for the acquisition.

TPG acquired MSB and DataQuick from McDonald Dettwiler & Associates in a November 2010 deal announced at $850 million.

MSB, said CoreLogic president and CEO Anand Nallathambi, occupies “a real niche” for residential and commercial property valuation space for the property and casualty insurance business as the experts in the replacement cost approach method.

DataQuick is a data licensing partner for CoreLogic, he added. Besides DataQuick Information Systems, CoreLogic is buying the credit and flood services operations from DataQuick Lender Solutions.

Frank Martell, CoreLogic chief financial officer said MSB and DataQuick “are high-margin, subscription-based business models that generate free cash flow conversion rates above CoreLogic standalone.”
CoreLogic has been undergoing a transformation the past two years called Project 30. The goal of Project 30 is to reach adjusted earnings before interest, taxes, depreciation and amortization margin of 30% by the end of 2013. It is the fifth of the company’s six operating pillars, Nallathambi said.

Earlier this year, management said the Project 30 cost reduction plan should result in cost savings of $60 million for 2012 and a projected $20 million for 2013.

Martell said all of the management teams from MSB and DataQuick will be joining CoreLogic. They are all “tremendous experts” in their respective fields.

MSB and DataQuick’s data licensing and analytics units will become part of CoreLogic’s data and analytics segment. The flood zone determination and credit servicing operations will be integrated into the mortgage origination services segment.

Martell added that MSB and DataQuick have been steadily growing “through thick and thin” cycles. CoreLogic will be able to accelerate growth when the companies are integrated.

While not providing a timetable for integration, Martell said it would be similar to the aggressive approach CoreLogic took this winter when it acquired CDS Business Mapping LLC. CDS provided real-time reports that identify property-specific geographic hazards including distance to coast, flood zones, rating territories, proximity to brush, wind pool eligibility and earthquake information to insurance carriers, agents and brokers.

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