October 25, 2007 / 1:21 PM / 12 years ago

UPDATE 3-Fidelity National to spin off mortgage services

(Adds stock price move, earnings detail)

By Joseph A. Giannone

NEW YORK, Oct 25 (Reuters) - Fidelity National Information Services Inc (FIS.N), a top vendor of data processing services for banks and home lenders, said on Thursday it will spin off its mortgage processing division into a separate publicly traded company.

The split will let Fidelity National focus on the transaction processing services business for banks and thrifts, which sell processing, electronic payments and card-processing services.

Fidelity National’s mortgage processing services generated $1.7 billion of revenue over the past 12 months, accounting for more than a third of the company’s overall revenue.

It sells data processing and other technology to mortgage lenders and processes more than half of all mortgage loans in the United States, the company said.

Fidelity National expects the spin-off to be completed by the middle of 2008, pending approval from the U.S. Securities and Exchange Commission and a ruling from the Internal Revenue Service declaring the transaction to be tax-free to shareholders.

Shares of Fidelity National Information rose 3 percent, or $1.42, to $48.07 in early trade on the New York Stock Exchange.

“Transaction processing services and lender processing services each have strong competitive positions, robust organic growth track records,” Fidelity National Executive Chairman William Foley Jr said, yet “they are distinct and unique businesses that serve different customers, operate in different markets and attract different investors.”

Post-split management and directors for Fidelity National and the new company have not yet been named.

On Wednesday, the company said third-quarter revenue rose 10 percent to $1.17 billion, while net income rose 20 percent to $98.7 million. Lender processing revenue climbed 8.5 percent to $444.2 million, or 38 percent of Fidelity’s total revenue in in the quarter.

Fidelity also warned that its 2007 cash earnings would be at low end of its previously forecast range of $2.44 to $2.50 per share, reflecting the sale of a unit. (Additional reporting by Ankur Relia in Bangalore)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below