Good Afternoon —
In last week's newsletter, I posed the question of which strategy will result in larger market share: M&A or tech development? And I got some interesting responses.
Sarah Perkins, the director of strategic accounts at Clear Title Agency of Arizona, said that she believes a firm's strategy of choice will depend on its size.
"Fidelity National is less likely to get FTC approval on a title company acquisition due to its size and market share than Stewart or Old Republic," Perkins said in an email. "First American is not too far behind FNF in market share so again, acquiring title companies could be tricky."
Perkins said where she expects to see M&A from the larger two of the "Big Four" is with technology, but that Stewart and Old Republic will also be looking to acquire some more technology firms.
While small, local title firms do not come close to the "Big Four" in terms of market share, they vastly outnumber them. Due to this I asked Perkins if she felt that a lot of these smaller firms were trying to build in order to make themselves appealing enough to be bought out by one of the top-10 underwriters.
"About two-three years ago, a mid-size local company started acquiring older, super small companies as well as heavily recruiting," Perkins said. "It was odd behavior for a company I had competed against for over a decade. Then Stewart Title bought them out and everything made sense."
She also went on to say that she has seen some title firms start with the end goal of being acquired, but she has seen others end the acquisition discussion before it starts. "Ultimately it depends on the title company's leadership and what they want," she said.
The one thing Perkins said we could for sure expect in 2022 is more title M&A from Stewart and, as if right on cue, Stewart announced Friday that it has acquired Franklin, Tennessee-based Homeland Title.
Nashville and the surrounding areas are some of the fastest growing in the country, so this acquisition is in line with the ones Stewart made at the close of 2021.
But I want to hear from you. Are you involved with a small title firm? What do you feel the goal of your firm is: building and remaining independent or building and becoming acquired? And just for fun: Which market do you think Stewart has its sights set on next?
Until next week,
Brooklee Han
Real Estate Reporter
bhan@housingwire.com
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