EXHIBIT 99.1
THE FIRST AMERICAN CORPORATION COMPLETES $375 MILLION
ACQUISITION OF TRANSAMERICA'S TAX AND FLOOD COMPANIES
-- Company to Host Conference Call to Discuss Strategy to Enhance
Bundle of Services to the Mortgage Community --
SANTA ANA, Calif., Oct. 1, 2003 -- The First American Corporation (NYSE:FAF),
the nation's leading diversified provider of business information and related
products and services, and Transamerica Finance Corporation, today announced the
completion of First American's acquisition of Transamerica's real estate tax
service and flood hazard certification businesses for a net cash purchase price
of $375 million. The structure of the transaction will result in a tax benefit
to First American of $186 million over a 15-year period with a net present value
of $115 million. The Transamerica businesses, which had combined pretax earnings
of $65.7 million on revenue of $245.1 million in 2002, have continued their
strong performance throughout 2003.
The transaction will be immediately accretive to First American earnings.
By integrating these businesses with current First American operations that
provide similar services, First American expects to benefit from significant
cost synergies that will result in additional pretax profit in excess of $50
million on an annualized basis. These synergies will be realized over the next
18 months as integration is completed.
First American, already the nation's leading provider of flood zone
certification and real estate tax services, will combine Transamerica's flood
data with its own to create the nation's preeminent flood zone determination
database. The addition of Transamerica's tax service operations helps to further
strengthen First American's position as the number one real estate tax service
provider to the nation's largest mortgage lenders.
"Transamerica is an excellent company with a very strong reputation for
technical expertise and customer service. The added scale of these operations
will allow us to better serve the mortgage lending community and provide the
mortgage industry's most comprehensive and accurate bundle of information
products and services," said Parker S. Kennedy, president of The First American
Corporation. "This combination helps to improve First American's long-term
profitability, and the quick integration of these businesses will allow us to
continue to provide the mortgage industry with high-quality information,
advanced technology and dedicated customer service."
"The completion of this transaction creates significant economic value and
is a great benefit to the shareholders of both companies," stated Robert Watson,
chief executive officer of
Transamerica Finance Corporation. "First American provided the perfect fit to
leverage the high quality customer base and operations of the Transamerica
businesses."
Transamerica Flood Hazard Certification Inc., which pioneered the flood
determination business, certifies the location of properties in flood zones to
four of the nation's top 10 mortgage lenders and to many of the nation's largest
insurance companies. This combination will facilitate First American's
commitment to supporting the mortgage closing process through timely and
accurate flood hazard determinations.
Transamerica Real Estate Tax Service Inc., headquartered in Dallas,
provides services to four of the nation's top 10 mortgage lenders from 15
offices nationwide, including a field force of associates who work with tax
collectors to help ensure the payment of property taxes and the reporting on tax
delinquencies. This business will be integrated with First American's tax
service business, also headquartered in Dallas. The similarities of the tax
service and flood certification businesses of both companies will facilitate a
smooth and swift integration process.
Financial performance for the new business will be included in the
operating results of the First American's Mortgage Information segment in the
fourth quarter of this year. First American completed this acquisition through
the 80-percent owned First American Real Estate Solutions (FARES) joint venture
with Experian Information Solutions, Inc. The transaction was funded from FARES'
existing cash and proportional cash contributions from First American and
Experian.
Teleconference/Webcast
First American will host a teleconference to discuss this transaction in
more detail on Thursday, Oct. 2, 2003, at 11 a.m. EDT. The dial-in number is
(888) 955-3516 and the pass code is FIRST AMERICAN. The live audio webcast of
the call will be available on First American's investor Web Site at
www.firstam.com/investor. A presentation summarizing the financial details of
the acquisition will also be available for download from the site. An audio
replay of the conference call will be accessible through Oct. 6, 2003, by
dialing (402) 998-1800. An audio archive of the call will also be posted for
replay on First American's Web site.
The First American Corporation, a Fortune 500 company and the nation's
leading diversified provider of business information, supplies businesses and
consumers with information resources in connection with the major economic
events of people's lives, such as getting a job; renting an apartment; buying a
car, house, boat or airplane; securing a mortgage; opening or buying a business;
and planning for retirement. The First American Family of Companies, many of
which command leading market share positions in their respective industries,
operate within seven primary business
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segments including: Title Insurance and Services, Specialty Insurance, Trust and
Other Services, Mortgage Information, Property Information, Credit Information
and Screening Information. With revenues of $4.70 billion in 2002, First
American has nearly 25,000 employees in approximately 1,400 offices throughout
the United States and abroad. More information about the company and an archive
of its press releases can be found at www.firstam.com.
Certain statements made in this press release, including those relating
to earnings accretion, the value and timing of synergies, tax benefits,
long-term profitability and the speed of integration are forward-looking.
Risks and uncertainties exist that may cause results to differ materially
from those set forth in these forward-looking statements. Factors that
could cause the anticipated results to differ from those described in the
forward-looking statements include: interest rate fluctuations; changes
in the performance of the real estate markets; access to public records
and other data; general volatility in the capital markets; changes in
applicable government regulations; consolidation among the company's
significant customers and competitors; the company's continued ability to
identify businesses to be acquired; changes in the company's ability to
integrate businesses which it acquires; and other factors described in
the company's Annual Report on Form 10-K for the year ended Dec. 31,
2002, as filed with the Securities and Exchange Commission. The
forward-looking statements speak only as of the date they are made. The
company does not undertake to update forward-looking statements to
reflect circumstances or events that occur after the date the
forward-looking statements are made.
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