First American Financial Corporation (FAF - Snapshot Report) recently announced that it has acquired TD Service Financial Corporation. As a result of this acquisition its subsidiaries – TD Service Company, Security Connections, Inc. (SCI) and TD Quality Control Services will also become a part of First American. The buyout will widen the acquirer’s capability to cater to the needs of the lender, servicer and investor communities.
TD Service is an industry leader in providing technology and services to the mortgage banking industry and focuses on post-closing services and document management.
The buyout will be beneficial for the acquirer as TD Service shares the same vigor for delivering outstanding customer service as the acquirer. In addition, the companies have similar core values and prioritize clients’ need. Therefore, this strategic move will benefit the customers and employees of both companies. This acquisition extends the already old relationship between TD Service and First American.
The acquisition of TD Service will better equip First American in providing a suite of post-closing suite services. It will therefore be able to expand its end-to-end offerings and capacity to support clients throughout the life cycle of a mortgage loan.
TD Service, on the other hand, is set to benefit form the acquirer’s superior fraud detection, loan quality and compliance analytics. These cutting-edge services will help TD Service Financial improve its post-closing technology and services. Moreover, the acquired company’s clients will benefit from First American Financial’s industry-leading position in real property data coverage and content. Also, the buyout will ensure that TD Service Financial’s clients continue to receive improved and efficient service.
TD Service will be able to provide more choices and deliver better solutions to its clients, with the help of the acquirer’s top-notch property and image data, and tailor-made lender support, which will help in catering to the stringent vendor management needs.
First American Financial has been boosting its inorganic growth profile through various strategic acquisitions. Last month, the property and casualty (P&C) insurer completed the buyout of RedVision Systems, Inc., which will enable it to further expand its industry leading position in title and property data. Hence, such strategic acquisitions will not only add substantial value to its inorganic portfolio, but will also improve the company’s overall results in the long run.
Currently, First American Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Acquisitions are a well-accepted strategy for growth among insurers. Last month, Brown & Brown of Connecticut, Inc., a subsidiary of Brown & Brown, Inc. (BRO - Analyst Report) , acquired the assets of Kronholm Insurance Services, Inc. Also, On Aug 15, Arch Capital Group Ltd. (ACGL - Snapshot Report) announced its decision to acquire United Guaranty Corporation and AIG United Guaranty Insurance Limited from the parent company, American International Group, Inc. (AIG - Analyst Report) .
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