First American Expands Title Insurance, Buys TitleVest

First American Financial Corporation’s FAF subsidiary – First American Title Insurance Company – announced the completion of acquisition of New York-based TitleVest Holdings Group, LLC.

The buyout of TitleVest – a leading provider of a range of title insurance and related services for real property purchase and refinance transactions – is reflective of the company’s strategy to become a premier title insurance and settlement services provider. The company has gained profitable market share in the core title insurance business by focusing on mergers and acquisitions.

First American Financial already has a long standing relationship with TitleVest. Adding the company to its portfolio will hence leverage its position in New York. In the fourth quarter, total revenues in the Title segment were $1.2 billion, a 3% increase from the fourth quarter of 2013 figure. Pretax income for the Title Insurance and Services segment was $125 million in the fourth quarter compared with $88million in the year-ago quarter. Pretax margin was 10.8% compared with 7.8% last year.

First American Financial earlier also adopted the inorganic route to ramp up its growth profile. In March last year, the company acquired Interthinx, Inc. from Verisk Analytics, Inc. VRSK. Interthinx – a subsidiary of Verisk Analytics, Inc. – was a leading provider of loan quality analytics, decision support tools and loan review services for the mortgage industry,

For 2015, First American expects that the investments that it makes in its people, its technology and its data assets, will position it well to capitalize on its ongoing housing recovery and to achieve its vision of becoming the premier title insurance provider.

First American Financial holds a Zacks Rank # 2 (Buy). Other players worth considering include Allied World Assurance Company Holdings, AG AWH and AmTrust Financial Services, Inc. AFSI. Bothe these players carry a Zacks Rank # 1(Strong Buy).