Irvine, Calif.-based CoreLogic. Inc. announced Monday that it is buying three
competitors in the real estate data and analysis field in a $661 million deal.
The deal includes DataQuick Information Systems; the flood division of DataQuick Lender Solutions; and Marshall & Swift/Boeckh, a Milwaukee supplier of replacement-cost information to insurance companies.
CoreLogic already is one of the nation's biggest real estate data firms; its 3.3 billion records cover 99 percent of U.S. homes. CoreLogic (CLGX) stock rose $1.88, or 8 percent, to $25.05 on Monday's news.
In a conference call with analysts, CoreLogic officials called the three firms "strong, iconic brands" with reliable lists of steady subscribers.
The acquisitions "significantly expands our footprint in property and casualty insurance and adds additional scale to our existing property data and analytics business," CoreLogic President and CEO Anand Nallathambi said.
DataQuick of La Jolla has information about more than 120 million U.S. homes, CoreLogic said, while DataQuick Lender Solutions division focuses on identifying flood zones. Marshall & Swift/Boeckh focuses primarily on replacement costs of residential and commercial properties and its client base includes 20 of the 25 top property insurers in North America.
The trio of companies, owned by Decision Insight Information Group, make money by selling reports and analyses to a host of clients, including lenders, insurance companies, government agencies, developers and investors.
The deal, which must be reviewed by the Federal Trade Commission and perhaps other agencies, comes on the heels of CoreLogic's $6 million acquisition of the S&P/Case-Shiller Home Price Index in April.
DataQuick and Case-Shiller both produce home-price surveys that compete with CoreLogic's own respected index. The deals would give CoreLogic ownership of three of the nation's top four premier home-price reports, Chief Financial Officer Frank Martell said.
But Martell said the acquisitions are "complementary," not duplicative, leading to new insights and reports blending the strengths of all four data firms.
The proposed deal is expected to close later this summer.
"We're excited about these companies," Martell said. "I think they add additional capabilities to CoreLogic's products and services, and I think the three companies together are stronger."
CoreLogic continues to produce the Case-Shiller survey as an independent report.
Martell said little is expected to change initially at DataQuick and Marshall & Swift/Boeckh. After the deal closes, he said, CoreLogic will spend six to 12 months reviewing how to best integrate the new acquisitions into its operation.
The company needs to ensure that current clients will continue to get their reports.
But the goal is to develop new reports that probe even more deeply into real estate market trends.
"Whatever data's there today will be there once the deal is closed," Martell said. "The whole goal is to create new insights."
CoreLogic estimated that the deal would, in theory, have added about $111 million in revenue to the company's 2012 operations for a combined total of nearly $1.7 billion.
Under the acquisition, CoreLogic's global workforce would increase by about 800 employees, or 16 percent.
CoreLogic officials said the Federal Trade Commission will look at antitrust considerations as well as other factors.
Martell said that there is "an ocean" of other home-price and sales providers in the industry -- including those from regional suppliers, the National Association of Realtors, government agencies and Lender Processing Services.
"We don't think there's an anti-competitive element to this deal," he said.
CoreLogic CEO Nallathambi called the acquisition "a compelling and logical next step" for the firm. The company's goal is to derive at least half of its revenue from its data and analytics segment, compared to 39 percent in 2012.
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