Private activist buyout firm, Thomas H. Lee Partners L.P. (THL) and Insurance company, Fidelity National Financial, Inc. (FNF) announced that they have entered into a merger agreement under which Ceridian Corp. will be jointly acquired in an all cash transaction valued at approximately $5.3 billion. The announcement concludes Ceridian’s previously announced exploration of strategic alternatives.

“The primary goal of the review of strategic alternatives that we announced on February 13, 2007, was to maximize value for our shareholders,” said L. White Matthews, III, Chairman of Ceridian.

“We are very excited about our investment in Ceridian,” said FNF Chairman and Chief Executive Officer William P. Foley, II. FNF has a track record of managing business acquisitions. In 2003 FNF bought Alltel Information Services, under similar circumstances and used it as the cornerstone in building what is now Fidelity National Information Services, a nearly $10 billion market cap company.

THL Partners and FNF expect to bring co-investors into the transaction. FNF will own less than 50% of Ceridian at closing and will treat the Ceridian investment under the equity method of accounting for financial statement purposes, similar to its minority ownership stake in Sedgwick CMS, and will not consolidate the financial results of Ceridian.

Under the terms of the agreement, Ceridian shareholders will receive $36.00 per share in cash for each share of common stock they hold. The transaction will be presented to Ceridian shareholders for approval at Ceridian’s Annual Meeting no later than September 21, 2007.

THL Partners is a successful private equity investment firm with approximately $20 billion of committed capital. FNF is a provider of title insurance, specialty insurance and claims management services, who with their underwriters cover approximately 29% of all title insurance policies in the United States. 

Alex Akesson

Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net