{"id":24110,"date":"2011-09-27T09:00:10","date_gmt":"2011-09-27T13:00:10","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/09\/27\/corelogic-acquisition-rumors-flaring-up\/"},"modified":"2011-09-27T09:00:10","modified_gmt":"2011-09-27T13:00:10","slug":"corelogic-acquisition-rumors-flaring-up","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/09\/27\/corelogic-acquisition-rumors-flaring-up\/","title":{"rendered":"CoreLogic Acquisition Rumors Flaring Up"},"content":{"rendered":"<p><a href=\"http:\/\/www.investmentu.com\/2011\/September\/corelogic-acquisition-rumors.html\">CoreLogic Acquisition Rumors Flaring Up<\/a><\/p>\n<p>by <a title=\"Justin Dove Archives\" href=\"http:\/\/www.investmentu.com\/investment-experts\/justin-dove-archive.html\" target=\"_blank\">Justin Dove<\/a>, <em>Investment U<\/em> Research<br \/>\nTuesday, September 27, 2011<\/p>\n<p>Back on August 30, data and analytics company <strong>CoreLogic<\/strong> (NYSE: <a title=\"CoreLogic (NYSE: CLGX)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3ACLGX\" target=\"_blank\">CLGX<\/a>) announced that it hired investment bank Greenhill &amp; Co.to help advise a potential sale.<\/p>\n<p>Friday, rumors were picking up steam as analysts predicted the company&#8217;s stock could fetch a premium of between 30 and 50 percent. By Friday afternoon, CoreLogic options activity was up 382 percent more than normal, signaling optimism at a possible sale.<\/p>\n<p>Its stock was trading around $11.50 on Friday \u2013 47 percent above its low in late August, but 43 percent less than its 52-week high.<\/p>\n<p>Reuters reported that TPG Capital paid &#8220;about 11 times EBITDA&#8221; in buying CoreLogic-competitor MDA DataQuick last year. That means someone could pay up to $18 per share for CoreLogic \u2013 a 56-percent increase over Friday&#8217;s price.<\/p>\n<p><strong>CoreLogic Wooed By Up to Seven Suitors<\/strong><\/p>\n<p>Reuters also reported that &#8220;at least <a href=\"http:\/\/www.reuters.com\/article\/2011\/09\/23\/us-dealtalk-corelogic-idUSTRE78M1ZT20110923?feedType=RSS&amp;feedName=innovationNews&amp;rpc=43\" target=\"_blank\">two strategic buyers and five private equity firms<\/a> have shown interest in the company.&#8221;<\/p>\n<p>Companies listed as showing interest are:<\/p>\n<ul>\n<li><strong>IBM<\/strong> (NYSE: <a title=\"IBM (NYSE: IBM)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AIBM\" target=\"_blank\">IBM<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>InfoSys<\/strong> (Nasdaq: <a title=\"InfoSys (Nasdaq: INFY)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3AINFY\" target=\"_blank\">INFY<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>Accenture<\/strong> (NYSE: <a title=\"Accenture (NYSE: ACN)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AACN\" target=\"_blank\">ACN<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>Fidelity National Information Services<\/strong> (NYSE: <a title=\"Fidelity National Information Services (NYSE: FIS)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AFIS\" target=\"_blank\">FIS<\/a>)<\/li>\n<\/ul>\n<p>The more suitors there are for an acquisition, the higher the probability of a bidding war. If these rumors prove true, CoreLogic and its shareholders may stand to benefit.<\/p>\n<p><strong>CoreLogic&#8217;s Core Data and Analytics Products<\/strong><\/p>\n<p>CoreLogic is a data and analytics company spun off from <strong>First American Financial Corp.<\/strong> (NYSE: <a title=\"First American Financial Corp. (NYSE: FAF)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AFAF\" target=\"_blank\">FAF<\/a>) last year. The company operated at a profit the last two quarters, but failed to deliver for investors since its spin-off.<\/p>\n<p>CoreLogic&#8217;s core data and analytics products provide things from risk and fraud analysis to risk management and specialty financial data.<\/p>\n<p>But considering its bread and butter is mortgage data and analytics, the company is struggling along with<a title=\"The Housing Market's Lost Decade\" href=\"http:\/\/www.investmentu.com\/2011\/September\/housing-market-lost-decade.html\" target=\"_blank\"> the housing market<\/a>. Some analysts also believe that a complicated business plan is also holding back the newly independent company.<\/p>\n<p>&#8220;They have a bunch of things going on at the same time,&#8221; an analyst told <a href=\"http:\/\/www.housingwire.com\/2011\/09\/02\/corelogic-committee-to-juggle-complexity-sale-unlikely\" target=\"_blank\">HousingWire.com<\/a>. &#8220;It&#8217;s a complicated business model which makes it tougher for investors.&#8221;<\/p>\n<p><strong>CoreLogic: Just Parts of a Whole?<\/strong><\/p>\n<p>This assumption makes some wonder if CoreLogic will be sold as a whole, or whether it will just sell pieces of its company to lighten the load.<\/p>\n<ul>\n<li>CoreLogic already sold off its India-based operation to <strong>Cognizant<\/strong> (Nasdaq: <a title=\"Cognizant (Nasdaq: CTSH)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3ACTSH\" target=\"_blank\">CTSH<\/a>) in July. This all came after expansion earlier this year.<\/li>\n<\/ul>\n<ul>\n<li>In January, CoreLogic bought RP Data, a firm that operated in similar segments in Australia and New Zealand, to increase exposure to the Asia-Pacific region.<\/li>\n<\/ul>\n<ul>\n<li>Then in March, it bought cloud-computing firm Dorado Network Systems Corp. to enable data cloud options to its clients.<\/li>\n<\/ul>\n<p>CoreLogic certainly could just be optimizing its operations, but analysts, such as Morningstar&#8217;s Brett Horn, believe the company is most valuable as a whole.<\/p>\n<p>&#8220;I think their complete business is more valuable than in pieces,&#8221; Horn told Reuters. &#8220;Just selling these pieces separately to different buyers is probably not going to be the most effective way to realize their value.&#8221;<\/p>\n<p><strong>CoreLogic&#8217;s Struggling Bottom Line<\/strong><\/p>\n<p>CoreLogic, although profitable, is struggling. There&#8217;s also the potential that it will only sell pieces of its business. But if the whole company is sold to a strategic buyer or investment firm, investors could make a quick profit on the premium.<\/p>\n<p>A potential sale is somewhat priced into the stock, as shown by its 40-percent gain since the announcement. But the stock is likely undervalued due to a slumping overall market and a poor housing industry, but should still garner a further premium from a potential buyer.<\/p>\n<p>Considering the 52-week high is above $20 per share, there&#8217;s reason to think a possible a buyer could pay close to that amount. It also bodes well that there are up to seven suitors. A bidding war could drive up the premium.<\/p>\n<p>It may be wise to stay tuned to see if CoreLogic does in fact get bought out as a whole and how much companies are willing to fork out.<\/p>\n<p>Good investing,<\/p>\n<p>Justin Dove<\/p>\n<div>\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=rGmstXFSFTM:3Cj6_SEZuTY:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=rGmstXFSFTM:3Cj6_SEZuTY:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=rGmstXFSFTM:3Cj6_SEZuTY:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=rGmstXFSFTM:3Cj6_SEZuTY:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=rGmstXFSFTM:3Cj6_SEZuTY:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=rGmstXFSFTM:3Cj6_SEZuTY:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=rGmstXFSFTM:3Cj6_SEZuTY:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=rGmstXFSFTM:3Cj6_SEZuTY:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/rGmstXFSFTM\" height=\"1\" width=\"1\" \/><\/p>\n<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>CoreLogic Acquisition Rumors Flaring Up by Justin Dove, Investment U Research Tuesday, September 27, 2011 Back on August 30, data and analytics company CoreLogic (NYSE: CLGX) announced that it hired investment bank Greenhill &amp; Co.to help advise a potential sale. Friday, rumors were picking up steam as analysts predicted the company&#8217;s stock could fetch a &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/fx\/2011\/09\/27\/corelogic-acquisition-rumors-flaring-up\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;CoreLogic Acquisition Rumors Flaring Up&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-24110","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=24110"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24110\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=24110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=24110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=24110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}