(This is an excerpt from an article I originally published on Seeking Alpha on May 23, 2013. Click here to read the entire piece.)
I have followed Lender Processing Services (LPS) for what seems like a very long time, a near lone voice on Seeking Alpha banging the table for LPS as a recovery play (see for example “Settlement By Lender Processing Services Clears Major Overhang” in early February). So, I find it a bit gratifying that all the work and patience have paid off, capped by news that Fidelity National (FNF) is joining with Thomas H. Lee to buy back LPS. LPS was spun off FNF just five years ago, so I find this M&A deal a bit surprising. I certainly was not anticipating anything like it.
The buyout value for LPS is supposedly around $2.9B. That prices LPS shares around $34. That just happens to be the price of LPS right before “foreclosuregate” broke, an appropriately symbolic completion of the company’s rise from foreclosuregate:
Source: FreeStockCharts.com
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One eyebrow raising moment was the announcement that John Snow, former Secretary of the Treasury and President of JWS Associates had joined the LPS Board of Directors. I considered this a huge win and vote of confidence in the company. Now this move seems even more interesting coming just weeks ahead of this news of a potential acquisition. I also took great interest in an expanded contract with the Federal Reserve Board to provide mortgage data aggregation.
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Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on May 23, 2013. Click here to read the entire piece.)
Full disclosure: long LPS