CoreLogic Buys CDS Business

In an effort to solidify its position as a leading provider of geo-spatial property data and analytics, CoreLogic Inc. (CLGX - Snapshot Report) purchased Middletown, Conn.-based CDS Business Mapping, LLC (“CDS”) for $78 million.

CDS Business Mapping through its web-based solution provides information to its clients for the recognition of property-specific geographic hazards in the Unites States. Its clients include more than 700 insurance carriers, agents and brokers.

CDS will be combined with CoreLogic Spatial Solutions business and its financial results will be reported under the Data and Analytics segment. This acquisition is expected to be accretive to the company’s 2013 earnings per share. The Zacks Consensus Estimate for 2013 is $1.61 per share, up 4.7% year over year.

CoreLogic’s ample liquidity helped it pursue this strategic acquisition in cash. It ended the third quarter with cash and cash equivalents of $154.6 million, while operating cash flow in the first nine months of 2012 amounted to $268.5 million.

CoreLogic Spatial Solution data and analytics have increasingly become popular over the past several years. This gain in adoption and popularity was fuelled by the higher demand for real-time geo-coded property and hazard-related data, analytics and risk management services. The addition of CDS to its portfolio will thus enhance the natural hazard risk management offerings of this information, analytics and business services provider.

FTI Consulting Inc. (FCN - Analyst Report), a global business advisory firm, acquired The Salter Group, LLC - a leading provider of business and intangible asset valuations - for an undisclosed amount earlier this month. Stantec Inc. (STN - Snapshot Report), a professional consulting service provider, also bought Washington-based survey and mapping firm, Landmark Survey and Mapping, Inc., in mid Dec 2012. This acquisition was targeted to solidify its footprint in the Mid-Atlantic region of the United States.

CoreLogic delivered 6 straight quarters of positive earnings surprise, with an average beat of 22.1%. The Zacks Consensus Estimate for fourth quarter 2012 is currently pegged at 31 cents, up 35.5% year over year, while the same for 2012 is $1.53, improving 68.7% over 2011. Based on the positive Zacks Earnings Surprise Prediction or ESP and a Zacks Rank #2 (Buy), we expect CoreLogic to beat expectations when it reports the fourth quarter 2012 results.

While both FTI Consulting and Stantec share the same Zacks Rank, Navigant Consulting Inc. (NCI - Analyst Report), a specialty consulting firm carries a Zacks Rank #2 (Buy).