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First American and Experian in Venture

Real estate: Two firms will meld property information subsidiaries in bid for efficiency.

September 11, 1997|JOHN O'DELL | TIMES STAFF WRITER

Credit data giant Experian Inc. and real estate services leader First American Financial Corp. said Wednesday that they will mesh their real estate information subsidiaries into a new company with $450 million in annual sales.

The as-yet-unnamed business would be the nation's largest provider of raw information and information-processing software products to the real estate and mortgage industries.

Officials of the firms said they don't expect many layoffs as they meld Orange-based Experian's real estate unit and its 1,000 employees with First American operations and their 3,000 workers. Terms of the deal were not disclosed. All of the individual operating units would remain in place, the companies said.

First American's stock climbed $4.63 a share to close at $53 on the New York Stock Exchange on the news, which industry analysts applauded.

The deal is a response to consolidation of the real estate and mortgage lending industries and pressure from consumers, lenders, real estate brokers and the government to lower the cost and speed the process of closing home purchases, said Van Skilling, Experian chairman and chief executive.

First American officials said they expect to save as much as $20 million a year through the merger.

Santa Ana-based First American would own 80% of the new firm, which would be run from First American's real estate information services headquarters in St. Petersburg, Fla. Experian, a key operating unit of Great Britain's Great Universal Stores, would hold a 20% stake.

The deal was approved Wednesday by both firms' boards but is subject to a definitive agreement and regulatory approval.

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