CoreLogic Inc. has experienced as much corporate intrigue in a little more than a year than some companies its size will go through in a decade.
The Santa Ana-based data and analytics company’s wild ride as a stand-alone business—which began with a June 2010 spinoff from First American Corp.—has seen its share of stock swings, divestitures, acquisitions, personnel shake-ups and litigation in its first year.
The rollercoaster took another turn last week on news of a potential sale or merger of the company, which has about 750 local employees and last year ranked as Orange County’s 11th-largest public company with $1.7 billion in revenue.
CoreLogic provides a variety of consumer, financial and property data to lenders, corporations and government agencies.
The company said last week it is forming an independent committee to explore strategic options, and has hired New York-based investment bank Greenhill & Co. to serve as a financial adviser. It is also considering cost cutting, stock and bond buybacks, and selling off some business lines.
Talk of a potential sale was the best news that Wall Street has heard from CoreLogic so far this year.
Shares jumped nearly 30% on the an-nouncement, giving the company a market value of about $1.2 billion.
That jump got back a sizeable chunk of a decline seen in early August, when CoreLogic lowered its earnings estimate for the rest of the year and saw its stock plunge and its market value dip below $1 billion.
CoreLogic Chief Executive Anand Nal-lathambi last month cited a tepid mortgage and housing market and a lack of a typical seasonal pick-up in business for the “increasingly cautious” earnings outlook for the remainder of the year.
The company now expects to earn about $65 million in profits this year, compared to prior expectations of about $110 million.
At least one of CoreLogic’s largest institutional investors, Boston-based Highfields Capital Management LP, is on board with a sale.
“We believe that a sale of the company to a financial or strategic buyer, of which we believe there are many, is the best approach to maximize value for shareholders,” Highfields Chief Executive Jonathon Jacobson said in an Aug. 29 letter to CoreLogic’s board.
Highfields owns 7.7% of CoreLogic’s stock. It also was a big shareholder in First American Corp. and pushed for changes there prior to CoreLogic’s 2010 split. High-fields forced a 2008 shake-up to First American’s board of directors, resulting in five new members it backed.
Three of the Highfield-backed members moved to CoreLogic’s board after the split, although only one remains. Paul Folino, executive chairman of Costa Mesa-based networking equipment maker Emulex Corp., is the most recent appointment to the board.
Natural Candidates
Private equity firms are seen by some as the most likely buyers if CoreLogic goes on the block. The company is “perhaps a natural takeover candidate for private-equity firms, assuming they haven’t been spooked by the recent market gyrations,” The Wall Street Journal’s Deal Journal blog said.
Sale rumors are only the latest headlines involving CoreLogic, which has been involved in a variety of transactions this year.
It paid $32 million in March for the remaining stake it didn’t already own in Dorado Network Systems Corp., a San Mateo-based mortgage software company.
Dorado provides cloud computing software that automates the loan origination process. CoreLogic previously owned 38% of the company.
In July, CoreLogic announced it was selling its India-based outsourcing business to Teaneck, N.J.-based Cognizant Technology Solutions Corp. for about $50 million.
That deal stands to reduce CoreLogic’s global work force by about 4,000 people, and appears to be part of the company’s recent attempts to cut costs.
Closer to home, CoreLogic last week announced plans to move its headquarters from Santa Ana to the Irvine Spectrum. It signed a lease for 170,000 square feet at the recently built 40 Pacifica office tower owned by Newport Beach-based Irvine Company in one of the larger office deals signed in Orange County of late.
FDIC
The move to 40 Pacifica is expected to take place next summer, after the building’s current main tenant, the Federal Deposit Insurance Corp., departs.
The 40 Pacifica building isn’t the only connection between CoreLogic and the FDIC.
In May, the FDIC filed a lawsuit against CoreLogic seeking to recover at least $129 million in losses tied to appraisals that a CoreLogic affiliate conducted for Washing-ton Mutual Inc., now part of New York-based JPMorgan Chase & Co.
The case is ongoing, according to court documents.
