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First American to Acquire National Information Group

November 19, 1998|From Bloomberg News

First American Financial Corp., a provider of title insurance, agreed to acquire National Information Group for $106 million in stock to broaden the range of real estate services and insurance it sells.

National Information investors will get 0.67 of a First American share for each National share, or $22.28, based on First American's closing price Tuesday.

Shares of South San Francisco-based National Information today surged $7.25, or 62%, to $18.88.

The proposed deal would give Santa Ana-based First American a company that generated $53.1 million of revenue last year from real estate tax services and from determining if properties are in flood-prone areas.

National Information also helps mortgage lenders as well as automobile finance and leasing firms verify that their borrowers are insured. Its Great Pacific Insurance Co. provides insurance through lenders.

First American will issue about 3.2 million shares to make the purchase. Its stock, which more than doubled this year, fell $1.56 a share to $33.25.

The transaction, which is expected to be completed by the end of March, will be treated as a pooling of interests, making it tax-free to shareholders, the companies said.

National Information shareholders with about 38% of the company's common stock already have pledged support for the merger, which also needs approval from regulators.

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