Santa Ana-based First American Corp. said on Thursday it increased its offer to buy the remaining 20% of Poway-based First Advantage Corp. it doesn’t already own for about $220 million.
First American, which provides title insurance and business information services, said the latest offer is 48% more than what First Advantage’s shares closed at on June 26, just prior to the company’s first buyout offer.
The June offer helped boost First American’s direct and indirect stake in its subsidiary from 74% to 80%.
First Advantage, which provides consumer credit, motor vehicle and employment background checks, among other services, counts a market value of about $1.1 billion.
First American’s latest offer values the company at about that.
First Advantage said a special committee of the board of directors is recommending that its shareholders accept the latest buyout offer.
Under the new offer, First Advantage’s shareholders would receive 0.58 of a First American common share for each share of First Advantage common stock tendered in the exchange offer.
In late June, First American offered First Advantage shareholders about 0.54 of a First American share for each share of outstanding First Advantage common stock.
The move is an about-face for First American, which spun off First Advantage into its own publicly-traded company earlier this decade.
The transaction comes as First American is in the stages of another spin off, preparing to separate its core title insurance business from its high-tech mortgage and information systems operations.
The company counts a market value of about $3 billion.
