FNFV will become an “investment vehicle” once the spin-offs are completed | Jax Daily Record | Jacksonville Daily Record


In a few months, the still confusing mix of companies under the Fidelity National Financial Inc. umbrella should be much clearer after Fidelity completes the split of two companies under its control.

As Fidelity announced in late 2016, the company plans to distribute its controlling stake of 83.3 million shares of Black Knight Financial Services Inc. to shareholders of Fidelity.

Fidelity will also separate its investment subsidiary Fidelity National Financial Ventures, or FNFV, as a separate public enterprise.

Fidelity has not announced a corporate structure for an independent FNFV. But during quarterly conference calls for Fidelity and FNFV last week, Fidelity chairman Bill Foley gave an overview of what the new FNFV will be.

While not a separate company at this time, FNFV does track shares on the New York Stock Exchange. Once established, FNFV – which owns stakes in a wide range of companies – will be able to raise additional funds to make more investments, Foley said.

“This is one of the reasons we want to take FNFV out of the umbrella of FNF tracking stocks,” he said. “Looking back, maybe we should have started a business and started it to start.”

The FNFV does not expect to become a business owner but will invest in them instead.

“FNFV is going to be an investment vehicle that will hold majority stakes because we don’t want to be an investment company,” Foley said, although a lot of people would say that an “investment vehicle” and “company investment “are the same thing. .

Fidelity-owned FNFV is making money actively buying and selling company shares, but it will likely be quiet for the next few months as it works on the split plan. He must prepare separate audited financial statements before completing the spin-off and new transactions could have an impact on this.

“We don’t necessarily want to do big corporate deals that might push that deadline any further than it needs to be,” Fidelity executive vice president Brent Bickett said.

Foley said the company hopes to complete the distribution of its Black Knight shares from mid-June to mid-July, and complete the FNFV split after that.

When the wheels stop spinning, four independent public companies will be headquartered at the Fidelity’s Riverside Avenue complex: Fidelity, FNFV, Black Knight and Fidelity National Information Services Inc., which was derived from Fidelity National Financial in 2006.

As four separate companies, we hope that the operations of all will be much easier to understand.

Fidelity expands its activity in securities

Fidelity National Financial will be primarily a title insurance company once transactions are completed, but it plans to expand its reach into securities-related business, Foley said.

“We are very interested in controlling the real estate transaction from the moment the ad is opened with the real estate agent, and then managing that transaction on behalf of the real estate agents and lenders throughout the title, all the time. way to the fence, ”he said.

Fidelity also continues to expand its securities business, making “12 or 13” relatively small acquisitions last year to increase its securities agent network and market share, Foley said.

The company reported adjusted earnings of 71 cents per share in the fourth quarter, down from 55 cents in the fourth quarter of 2015 and 9 cents more than analysts’ average forecast, according to Yahoo Finance.

Black Knight’s earnings on the rise

Black Knight reported higher profits in the fourth quarter and said he expects profits to continue rising this year.

Adjusted fourth-quarter earnings rose 4 cents per share to 30 cents, with revenue up 10% to $ 263 million.

Black Knight provides processing services for over 60% of all senior mortgages in the United States and its share of the industry is expected to grow after adding more lenders as clients in 2016.

“We have exceeded our internal plans and the guidance we provided at the start of the year on all key financial metrics and had what we believe to be a year of record sales,” CEO Thomas Sanzone said at the company conference call.

“This exceptional year for sales means that 2017 will be a year of implementation for Black Knight. The implementations for many of the clients that we have signed on over the last few quarters will be completed by mid-2017 and into 2018, ”he said.

These new sales will increase income. After reporting adjusted earnings of $ 1.15 for all of 2016, Black Knight is forecasting 2017 earnings of $ 1.32 to $ 1.36 per share.

Black Knight stock opened $ 2.35 higher to $ 39 on Thursday morning after the earnings report before closing at $ 38 on Thursday.

Foley retires from FIS

Foley has remained involved with Fidelity National Information Services, or FIS, since the banking technology company was split from Fidelity National Financial, as vice chairman of the board.

However, Foley severed ties with the FIS.

In a Securities and Exchange Commission filing, FIS said Foley and another director, Richard Massey, will step down from the board when their terms expire this spring.

The retirements “were based on the time needed to pursue other business interests,” the file said.

Foley has a wide range of business interests beyond Fidelity and the spinoffs.

Most notably, he is the primary partner of an expanding National Hockey League franchise in Las Vegas that will begin playing next season.

Rayonier AM drops after profits

Rayonier Advanced Materials Inc. reported fourth quarter adjusted earnings of 18 cents per share, down from 32 cents in the fourth quarter of 2015, but 2 cents higher than analysts’ average forecast, according to Yahoo Finance.

Despite beating expectations in the fourth quarter, Rayonier AM stock fell $ 3.21 to $ 13.57 on Tuesday after the report, as investors were disappointed with its forecast for 2017.

The Jacksonville-based company, which manufactures specialty cellulosic products, forecasts net profit of $ 41 million to $ 48 million in 2017, which would be down from $ 67 million in 2016.

While this forecast is disappointing, “we wouldn’t be shocked to see the forecast increase as the year progresses,” DA Davidson analyst Steven Chercover said in a research note.

Rayonier AM stock has experienced several significant declines in the past three years since its separation from Rayonier Inc., due to disappointing financial results. But it had rebounded and increased by more than 130% in the past year before the earnings report, Chercover said.

“While the liquidation was a painful throwback to Rayonier AM’s previous disappointments, we view the pullout as an attractive buying opportunity for those who are able to withstand the short-term volatility that we would attribute to a conservative guide.” , did he declare.

Landstar system exceeds expectations

Landstar System Inc. reported fourth quarter earnings of 94 cents a share, 6 cents higher than the fourth quarter of 2015 and above the Jacksonville-based trucking company’s forecast of 85 cents to 90 cents.

“Our 2016 results reflect a soft operating environment and weak economic growth in the United States which negatively impacted revenue per load of truckloads. Even with these challenges and a typical year-over-year comparison, 2016 earnings per share was the second highest earnings per share in company history, ”CEO Jim Gattoni said at the Landstar conference call.

“We continue to focus on profitable load volume growth and increasing our available capacity to carry these loads. With the continued growth in cargo volume, we are well positioned to improve the pricing environment, ”he said.

Gattoni projected first-quarter earnings of 70 cents to 75 cents per share, in line with analysts’ average forecast of 73 cents, according to Yahoo.

Despite better-than-expected expectations for the fourth quarter, Landstar stock fell 20 cents to $ 83.75 on Thursday after the results were released. However, action had surged in the last two months of 2016 as part of the post-election transport rally.

Deductions give International Baler a profit

International Baler Corp. reported a sharp decline in sales in fiscal 2016, which ended October 31. But due to a tax benefit, the Jacksonville-based recycling and waste disposal baler maker still posted a profit for the year.

Sales for the year fell 35.6% to $ 11.65 million, largely due to lower shipments of higher-priced synthetic rubber balers, the company said in its report. annual.

Due to lower sales, International Baler recorded an operating loss of $ 23,102 for the year. However, the company “claimed beneficial tax deductions” which resulted in a net profit of $ 90,410 for the year.

BAE secures contract for USS Roosevelt

BAE Systems announced last week that it had won a contract of at least $ 51.3 million, which could reach $ 68.4 million, for the maintenance and modernization of the USS Roosevelt at the company’s facilities in Jacksonville.

BAE operates shipbuilding and repair facilities at the Mayport Naval Base and on Heckscher Drive. Work on the Roosevelt will be carried out at both facilities and will begin in April, with completion scheduled for April 2018.

The company has 530 permanent employees and 260 temporary workers at both facilities, BAE spokesman Karl Johnson said. The permanent workforce was around 800 two years ago before a series of layoffs.

He said Roosevelt’s contract would not result in “mass hiring”, but “it’s a big win for our team.”

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