Fidelity National Financial on Wednesday announced the closing of its purchase of 29 percent equity stake in Covansys, a global provider of strategic outsourcing and integration services that has operations in India.
Under the terms of the agreement, Fidelity’s subsidiary, Fidelity Information Services, bought 8.7 million common shares from Covansys and 2.3 million common shares from Rajendra Vattikuti, Covansys founder and co-chairman of the board. Additionally, FIS received four tranches of warrants, each for 1 million common shares, with strike prices between $15 per common share and $24 per common share.
Fidelity Chairman and CEO William P. Foley II and Frank R. Sanchez, president of Fidelity’s strategy and product development division, have joined Covansys’ board of directors.
Fidelity announced the deal at the end of April, when it also announced it had signed a $150 million outsourcing contract with Covansys.
Covansys employed more than 2,500 “billable professionals” at development centers in Chennai, Mumbai and Bangalore, India, as of Dec. 31, 2003.
Fidelity is the nation’s largest title insurance company and also provides such real estate-related services as escrow, flood and tax certifications, merged credit reports, property valuations and appraisals, default management, relocation services, flood, homeowners and home warranty insurance, exchange intermediary services, mortgage loan aggregation and fulfillment, multiple listing services software, mortgage loan origination software, collateral scoring analytics and real property data. The company is also one of the world’s largest providers of information-based technology solutions and processing services to financial institutions and the mortgage and financial services industries. Fidelity’s total revenue was $7.7 billion, earnings were $860 million and cash flow from operations was nearly $1.3 billion last year.
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