First American offers to buy First Advantage

First American Corp. said Monday it has made an offer to acquire the remaining stake in First Advantage Corp. in an all-stock deal.

First American, a business information and specialty and title insurance provider, already indirectly owns 74 percent of First Advantage's stock. First Advantage provides risk management services.

Under the terms of the offer, First Advantage shareholders would receive 0.5375 shares of First American common stock for each share of First Advantage they own. The offer values First Advantage shares at $14.04, a 10 percent premium to Friday's closing price of $12.75.

First American said it expects the acquisition to boost earnings in 2010.

The full acquisition of First Advantage will improve financial flexibility and efficiency, while reducing organizational complexity, Parker Kennedy, First American's chairman and chief executive said in a statement.

The move would also boost the financial strength of First American ahead of plans to separate its information solutions and financial services businesses.

Last year, First American said it would spin off its financial services companies, which are primarily composed of its title and specialty insurance divisions. The new company will be called First American Financial Corp.