Fidelity National Financial Inc. on Wednesday agreed to sell its flood insurance business to WRM American Holdings LLC for $210 million.
The business has been profitable for FNF for the past 10 years, said chairman William P. Foley, but added that the sale will allow the title insurance giant to redeploy capital "into other uses that can continue to create increased value for our shareholders."
WRM America is the parent company for a property and casualty insurer based in Uniondale, N.Y. FNF is based in Jacksonville, Fla.
The sale price includes $122.5 million of compensation, $75 million in a seller note, and a $12.5 million cash dividend from one of the units being sold (Fidelity National Indemnity Insurance Co.)
The seller note will have an 8% coupon, with interest payable quarterly and principal due in a balloon payment 18 months after the deal closes.
FNF expects to realize a $154 million pre-tax gain from this transaction.
