I published the press release from Santa Ana-based First American Title Insurance today, the second largest Title Company in the U.S., before I had a chance to sit down and tell you what I’ve been hearing on the street. First of all, the acquisition is underway and will be complete in January. David Fair will stay on in his current capacity for the next several years. (What else would he do?) Apparently the buy out offers have been pouring in for the last 15 years, but David played hard-to get and never loved the terms. This time, however, insiders tell me he found a dance partner he could dance with. The company will be called Hexter-Fair/First American — significant, H-F retains first name placement. Insiders at H-F tell me this is a huge boom for employee benefits and technology since First American is viewed as a leader in the technology side of the biz. As one employee puts it: we’re getting way more bells and whistles but at the end of the day, people will still come here because of who we are, who is closing them. Personalized, customized, family-friendly service that has been a hallmark of H-F will continue to be priority one, they say.
Why did H-F sell? The title business has become increasingly competitive these days, challenged by the real estate bust, and like most high fixed-costs businesses, expenses are going up. Title rates are set by the state. Unlike risk policies that insure against the future, title insurance insures against the past. Title companies are overhead oinkers: large, expensive buildings to house huge staffs that cannot be sent home on slow days. Staffs need benefits and health insurance, all going nowhere but up. Add in a real estate recession and slow housing market, what do you get? Downsizing and consolidation, a circling of the wagons. Low interest rates and the re-fi boom have pretty much helped keep this biz afloat.
Most H-F employees (off record) think this will mean a better working environment with state of the art technology to give them a boost over the competition. (Does this mean we all get i-pads, asked one?) The competition, meanwhile, thinks they may have some benefits from the merger, too: dis-enchanted employees and clients. For the first few years, says one observer, everything will be the same. But Hexter-Fair, a private, family-run company, they say, has now become a corporate environment: Wells Fargo versus your small local banker. That will only benefit the small, locally owned title firms which can still offer that personal, DALLAS touch, they say.
SANTA ANA, Calif. , Dec. 22, 2011 /PRNewswire/ — First American Title Insurance Company, a leading global provider of title insurance and settlement services for real estate transactions, today announced that it has signed an agreement to acquire Hexter-Fair Title Company, a Dallas-Fort Worth -based title and escrow company founded in 1916.
The transaction is expected to close in January 2012 pending regulatory approval and terms of the deal were not disclosed. With the acquisition of Hexter-Fair, First American will increase its market share by adding 21 new offices in the Dallas-Fort Worth metropolitan area.
Hexter-Fair’s current owner, David Fair , will remain as chairman of the new entity, Hexter-Fair/First American Title Company, LLC, and will continue to be an integral part of the leadership team.
“This acquisition will significantly enhance First American’s title operations in Dallas-Fort Worth ,” said Dennis Gilmore , president of First American Title Insurance Company. “Together with Republic Title, the new entity will increase our range of service in that area and further our strategy to grow market share in the largest title and settlement services markets.”
About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF – News), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found at www.firstam.com.