Fidelity National Financial, Inc.’s (FNF) investment arm, Fidelity National Financial Ventures (FNFV), has closed the previously announced sale of Comdata Inc. to FleetCor Technologies, Inc. (FLT).
On announcement of completion of the divestiture, shares of Fidelity National Financial rose 1.81% and closed at $30.39 per share in the last trading session.
Upon closure of the deal, Fidelity National Financial Ventures indirectly received around 2.4 million shares of FleetCor common stock through Ceridian LLC. During the announcement of the sale, in Aug 2014, the common stock of FleetCor were valued at $317 million.
On the basis of FleetCor's closing stock price of $147.66 on Nov 13, 2014, those 2.4 million FleetCor shares are now valued at about $356 million. As per earlier disclosed details of the transaction, shares of FleetCor's common stock, which Fidelity National Financial Ventures owns indirectly, are subject to a six-month lockup from the Nov 14, 2014 closing date. Approximately 25% of these shares will be given to an escrow account in order to meet potential counterclaims, if any, for a period of up to three years from the completion of the sale.
For Ceridian LLC and its shareholders the stock-for-stock transaction is expected to be tax-free.
With the completion of the sale, Fidelity National Financial Ventures will now have an attractive investment in a leading company of the industry. The sale also represents a multiple of over 12 times trailing twelve-month EBITDA for Comdata. With the view of generating value for its shareholders the property and casualty insurer will participate in growth initiatives to ensure consistent success of FleetCor.
Currently, Fidelity National Financial holds Zacks Rank #3 (Hold). A better-ranked stock in the same industry worth considering is Atlas Financial Holdings, Inc. (AFH) with a Zacks Rank #1 (Strong Buy).
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