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Fidelity National buys Sedgwick for US$635 million


January 31, 2006   by Canadian Underwriter


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Fidelity National Financial, Inc. (NYSE:FNF), a Fortune 500 provider of outsourced products and services, has paid $635 million to purchase Sedgwick CMS Holdings, Inc.
Sedgwick CMS Holdings is the sole shareholder of Sedgwick CMS, a North American provider of outsourced claims and productivity management solutions to large corporate and institutional clients.
FNF also announced that Thomas H. Lee Partners, L.P. and Evercore Capital Partners have joined FNF as equity investors in Sedgwick CMS. At closing, FNF owns an approximately 40% equity stake in Sedgwick CMS, Thomas H. Lee owns an approximately 40% equity stake and Evercore owns an approximately 20% equity stake in Sedgwick CMS.
“We are very pleased to confirm this relationship with strong investors who share our vision of outstanding performance and continuing growth for Sedgwick CMS,” David A. North, the president and CEO of Sedgwick CMS, said. “Sedgwick CMS will remain an independently organized business. Our clients will receive the same outstanding attention from dedicated Sedgwick CMS colleagues reporting to the same management team. Our headquarters will remain in Memphis.
“Sedgwick CMS Chief Operating Officer James B. Wiertelak and I will serve on the Sedgwick CMS Holdings, Inc. Board, which FNF Chairman and Chief Executive Officer William P. Foley, II will chair. We look forward to working with Bill Foley, other members of the FNF team and our other investors in support of the ongoing development of Sedgwick CMS.”
According to Foley, “Sedgwick CMS provides FNF a very exciting opportunity in an attractive, growing market, while allowing us to leverage our core expertise in title insurance processing and financial transaction processing. The addition of Thomas H. Lee and Evercore as equity partners provides for further financial flexibility as we seek future opportunities in the third-party administration marketplace.”
Sedgwick CMS provides cost-effective claims administration, managed care, program management and related services to major employers through the expertise of over 4,000 colleagues in more than 80 offices in the U.S. and Canada. The company specializes in administrative and related cost management services for workers’ compensation; disability, FMLA and other employee absence; and general, automobile and professional liability claims.