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TPG, TH Lee buy part of FNF division

The two US buyout groups have agreed to spend $500m on a 25% stake in a subsidiary of Fidelity National Financial after reportedly eyeing the purchase of all of FNF.

US buyout groups Texas Pacific Group and Thomas H Lee are buying a 25 percent interest in Fidelity Information Services, a subsidiary of Florida-based title insures Fidelity National Financial (FNF).

The deal is part of a recapitalisation of the information services business valuing it at $4.8 billion including debt.

Prior to agreeing to acquire the stake, Dallas-based TPG and Boston-headquartered TH Lee reportedly considered buying all of FNF which has a market capitalisation of over $7 billion. According to the Financial Times, had that purchase gone ahead, it would have been the largest private equity transaction in the US in 2004.

FNF is a Fortune 500 company providing products and services to financial institutions and the real estate industry. In 2003, the company turned over more than $7.7 billion and earned over $860 million, according to its website.