Realogy Holdings Corp. has closed the sale of its title insurance underwriter.
An affiliate of private investment management firm Centerbridge Partners LP acquired Title Resource Guaranty Co. from Realogy for $210 million in cash and a 30% equity interest in the newly formed limited partnership joint venture that indirectly owns the entity, the Madison-based company announced March 29.
In October, Realogy said it was forming the Title Insurance Underwriter JV with an investment from funds affiliated with Centerbridge that would give a controlling 70% interest in Title Resource Guaranty Co.
“As we continue to reimagine and deliver a more integrated real estate transaction, today’s closing enables Realogy to be even more focused on our core business, including critical consumer-facing transaction services in franchise, brokerage, title settlement and escrow, and mortgage,” said CEO and President Ryan Schneider in a statement. “We look forward to working with our joint venture partners to more fully unleash the underwriter’s growth potential as we continue to invest in our strategic priorities and move both Realogy and the industry to what’s next.”
Realogy said its portion of future minority interest earnings from its stake in the company will be reported within the Realogy Title Group segment, which also includes its title, escrow and settlement services business along with its mortgage origination joint venture.
When the sale was announced, Realogy said it intended to use the cash proceeds, after taxes and transaction-related costs, to continue to invest in its business and de-lever.
Goldman Sachs & Co. LLC served as financial advisor to Realogy, while Gibson, Dunn & Crutcher served as legal advisor. Bank of America served as financial advisor to Centerbridge and Willkie Farr & Gallagher served as legal advisor for that company.
According to the Realogy, its national title settlement and escrow services — which operate in 44 states under 45 different brand names — helped to close 220,000 transactions in 2021. Those services represented the majority of Operating EBITDA generated by the segment, excluding the company’s share of equity earnings from its mortgage origination joint venture.